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CMS Energy (CMS) To Report Q4 Earnings: Is A Beat In Store?

By Zacks Investment ResearchStock MarketsJan 28, 2019 10:00PM ET
www.investing.com/analysis/cms-energy-cms-to-report-q4-earnings-is-a-beat-in-store-200380759
CMS Energy (CMS) To Report Q4 Earnings: Is A Beat In Store?
By Zacks Investment Research   |  Jan 28, 2019 10:00PM ET
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CMS Energy Corporation (NYSE:CMS) is set to report fourth-quarter and 2018 financial results on Jan 31, before the market opens. The company is expected to come up with a positive surprise this earnings season. Last reported quarter, the company delivered an earnings surprise of 3.51%.

Let's take a closer look at the factors influencing CMS Energy’s quarterly results.

Why a Likely Positive Earnings Surprise

Our proven model shows a likely earnings beat for CMS Energy 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) for this to happen. This is the case here as you will see below.

Earnings ESP: CMS Energy has an Earnings ESP of +0.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CMS Energy currently carries a Zacks Rank #2, which when combined with a positive ESP makes us confident of a probable earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

CMS Energy Corporation Price and EPS Surprise

CMS Energy Corporation Price and EPS Surprise | CMS Energy Corporation Quote

Factors to Consider

CMS Energy’s regulated electric power operations in Michigan generate relatively stable earnings. The state of Michigan witnessed one of the wettest winters this fourth quarter, which subsequently will result in lower household expenditure on heating. This, in turn, may go on to adversely impact the company’s revenues in the upcoming fourth-quarter results. In line with this, the Zacks Consensus Estimate for fourth- quarter revenues is pegged at $1,535 million, reflecting year-over-year fall of 13.7%.

Such low revenue expectations are likely to hamper the company’s bottom-line results as well. Meanwhile, absence of tax benefits, courtesy of the latest U.S. Tax Cuts & Jobs Act, lowered CMS Energy’s earnings in the third quarter of 2017. To this end, we may expect the upcoming results to reflect lower tax benefits. Considering these factors, the consensus mark for the company’s fourth-quarter earnings is pegged at 41 cents per share, representing a year over year decline of 19.6%.

Other Stocks to Consider

Here are a few other players from the industry that have the right combination of elements to post an earnings beat this quarter.

Ameren Corp. (NYSE:AEE) has an Earnings ESP of +4.62% and a Zacks Rank #1. The company is scheduled to report fourth-quarter results on Feb 14.

Allete Inc. (NYSE:ALE) has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is scheduled to release fourth-quarter results on Feb 14.

Xcel Energy (NASDAQ:XEL) has an Earnings ESP of +0.39% and a Zacks Rank #3. The company is scheduled to report third-quarter results on Jan 31.

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Ameren Corporation (AEE): Get Free Report

CMS Energy Corporation (CMS): Get Free Report

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Xcel Energy Inc. (XEL): Get Free Report

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CMS Energy (CMS) To Report Q4 Earnings: Is A Beat In Store?
 

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CMS Energy (CMS) To Report Q4 Earnings: Is A Beat In Store?

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