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Will Xcel Energy's (XEL) Q3 Earnings Surprise Estimates?

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Xcel EnergyXEL will release third-quarter 2015 financial results before the market bell on Oct 29, 2015. The company reported a negative earnings surprise of 2.5% in the previous quarter. Let's see how things are shaping up at Xcel Energy prior to this announcement.

Factors to Consider

Xcel Energy, at the end of 2014, generated nearly 45% of its electricity from coal-fired units. The company needs to step up its investments to lower emission levels and meet the standards of the new Climate Action Plan.

To that end, Xcel Energy continues to invest in green power generation assets. The company's clean energy strategy includes increasing the use of renewables and energy efficiency programs, as well as modernizing and retiring plants.

The warmer-than-expected temperature during the third quarter will have a positive impact on utility demand.

Earnings Whispers?

Our proven model does not conclusively show that Xcel Energy is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here.

Zacks ESP : Xcel Energy has an Earnings ESP of 0.0%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 80 cents.

Zacks Rank: Though Xcel Energy's Zacks Rank #2 increases the predictive power, its -0.00% ESP makes a surprise call uncertain.

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

Stocks to Consider

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

CMS Energy Corp. CMS has an Earnings ESP of +2.04% and carries a Zacks Rank #2.

FirstEnergy Corp. FE has an Earnings ESP of +1.16% and carries a Zacks Rank #2.

SCANA Corp. SCG has an Earnings ESP of +2.08% and carries a Zacks Rank #2.

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XCEL ENERGY INC (XEL): Free Stock Analysis Report

CMS ENERGY (CMS): Free Stock Analysis Report

FIRSTENERGY CP (FE): Free Stock Analysis Report

SCANA CORP (SCG): 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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