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Entergy (ETR) Q3 Earnings: Stock Likely to Beat Estimates?

Entergy CorporationETR will release third-quarter 2016 financial numbers before the opening bell on Oct 25. The company reported a positive earnings surprise of 201.94% in the last reported quarter. Let's see how things are shaping up prior to this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Entergy is likely to beat earnings this season because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates, and Entergy has the right mix.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +8.07%. This is because the Most Accurate estimate stands at $2.01, while the Zacks Consensus Estimate is pegged slightly lower at $1.86. This is a meaningful indicator of a likely positive earnings surprise.

Zacks Rank: Entergy's Zacks Rank #2, when combined with a positive ESP, makes us reasonably confident of an earnings beat this quarter.

Conversely, Sell-rated stocks (#4 or #5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

ENTERGY CORP Price and EPS Surprise

ENTERGY CORP Price and EPS Surprise | ENTERGY CORP Quote

Factors at Play

Entergy plans to invest $3.77 billion in 2016, with the lion's share being allocated for the generation and transmission businesses. The company expects grid upgrades, asset replacement, and industrial load growth to drive bottom-line growth.

The company's service territories witnessed above-average temperatures during the third quarter. This should lead to increased electric sales in these regions, which in turn, should boost the top line.

Other Stocks to Consider

Here are a few other operators in the electric utility space worth considering, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Pattern Energy Group Inc. PEGI has an Earnings ESP of +16.67% and a Zacks Rank #2. The company is expected to release third-quarter results on Nov 3.

CMS Energy Corp. CMS will report second-quarter results on Oct 27. The company has an Earnings ESP of +5.26% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

DTE Energy Company DTE has an Earnings ESP of +4.64% and a Zacks Rank #2. The company will report second-quarter results on Oct 26.

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CMS ENERGY (CMS): Free Stock Analysis Report

ENTERGY CORP (ETR): Free Stock Analysis Report

DTE ENERGY CO (DTE): Free Stock Analysis Report

PATTERN ENERGY (PEGI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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