Can Atmos Energy (ATO) Keep Earnings Streak Alive In Q3?

We expect Atmos Energy Corporation (NYSE:ATO) to beat earnings estimates when it reports third-quarter fiscal 2019 results on Aug 7, after the market closes. This natural gas distribution company delivered a positive earnings surprise of 8.33% in the last reported quarter.

Why a Likely Positive Surprise?

Our proven model shows that Atmos Energy is likely to beat on earnings in the to-be-reported quarter 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) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of +0.22%.

Atmos Energy Corporation Price and EPS Surprise

Zacks Rank: Atmos Energy currently carries a Zacks Rank #3. The combination of a Zacks Rank #3 and +0.22% ESP makes us quite confident of an earnings beat in the quarter to be reported.

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

Factors at Play

During the quarter, Atmos Energy continued to enjoy the benefits of strong economic development and consequent increase in customer volumes in its service territories. New gas distribution rates are expected to have a positive impact on earnings. We expect these positives to boost the company’s performance in third-quarter fiscal 2019.

The Zacks Consensus Estimate for total revenues and earnings per share (EPS) for third-quarter fiscal 2019 is currently pegged at $701 million and 69 cents, respectively. The revenue and EPS estimates indicate growth of 24.73% and 7.81%, respectively, from the year-ago reported figures.

Other Stocks to Consider

In addition to Atmos Energy, investors can also consider the following players from the same industry that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

ONEOK Inc. (NYSE:OKE) is slated to release second-quarter 2019 results on Jul 30. It has an Earnings ESP of +0.41% and a Zacks Rank #3.

New Jersey Resources Corporation (NYSE:NJR) is anticipated to release third-quarter fiscal 2019 results on Aug 6. It has an Earnings ESP of +9.80% and a Zacks Rank #3.

Northwest Natural Holding Company (NYSE:NWN) is anticipated to release second-quarter 2019 results on Aug 10. It has an Earnings ESP of +115.20% and a Zacks Rank #3.

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