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What's in Store for Dominion Resources (D) in Q2 Earnings? - Analyst Blog

Dominion Resources Inc.D will release its second-quarter 2015 financial results before the opening bell on Aug 5, 2015. In the previous quarter, this utility reported a positive earnings surprise of 3.13%. Let's see how things are shaping up for this announcement.

Factors Affecting this Quarter

Dominion has emerged as a big name for having a large-scale renewable generation portfolio. During the second quarter, the company acquired two solar facilities, one in Georgia and the other in California. One of the facilities was expected to enter into service in the second quarter, which would boost the quarter's revenues. Both the projects are expected to add 20 megawatts of solar generating capacity apiece in 2015.

On its first-quarter earnings call, Dominion had guided second-quarter 2015 operating earnings in the range of 65-75 cents per share, higher than 62 cents per share clocked in the year-ago quarter. The second-quarter results are likely to benefit from higher revenues from growth projects, the absence of planned refueling outages at Millstone Power Station and a return to normal weather. However, the second quarter results are expected to be negatively affected by higher operating expenses.

Moreover, in May 2015, Dominion issued new common stock worth $200 million. The company has completed $500 million of new equity issuances slated for 2015. More number of shares in the second quarter 2015 compared with the prior year may dilute Dominion's earnings per share.

Earnings Whispers?

Our proven model does not conclusively show that Dominion Resources will beat earnings this quarter. That is because 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 consensus estimates. That is not the case here as you will see below.

Zacks ESP: This is because the Most Accurate estimate stands at 72 cents per share, in line with the Zacks Consensus Estimate, resulting in a 0.00% ESP.

Zacks Rank: Dominion Resources' Zacks Rank #3 when combined with a 0.00% ESP makes an earnings prediction difficult.

We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some stocks in the broader utility space worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter.

UIL Holdings Corporation UIL has an earnings ESP of +7.14% and a Zacks Rank #3.

Consolidated Edison, Inc. ED has an earnings ESP of +1.56% and a Zacks Rank #3.

Chesapeake Utilities Corporation CPK has an earnings ESP of +2.63% and a Zacks Rank #3.

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CONSOL EDISON (ED): Free Stock Analysis Report

DOMINION RES VA (D): Free Stock Analysis Report

CHESAPEAKE UTIL (CPK): Free Stock Analysis Report

UIL HOLDINGS CP (UIL): 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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