DTE Energy (DTE) To Post Q4 Earnings: What's In The Cards?

DTE Energy Company (NYSE:DTE) is slated to report fourth-quarter 2017 results on Feb 16, before the opening bell.

Last quarter, the company posted a negative earnings surprise of 3.27%. However, DTE Energy surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average beat being 3.81%.

Let’s see how things are shaping up at the company prior to this announcement.

Factors at Play

During the third-quarter earnings call, DTE Energy’s management announced that it expects to witness higher revenues from the company’s subsidiary DTE Gas in the fourth quarter, primarily driven by higher gas main renewal revenues at base rates. We expect the yet-to-be-reported quarter’s results to reflect this.

However, the company’s service territories as a whole faced warmer-than-normal temperature in the fourth quarter, which in turn is expected to weigh down on revenues. In line with this, the Zacks Consensus Estimate for DTE Energy’s fourth-quarter revenues of $1.91 billion reflects a year-over-year decline of 33.7%.

On a brighter note, banking on its stronger year-to-date results as of Sep 30, 2017, DTE Energy raised its 2017 bottom-line guidance. Notably, improved performance at the company’s Gas Storage and Pipelines, Power and Industrial segments backed the guidance raise.

The consensus estimate for DTE Energy’s earnings of $1.20 per share for the fourth quarter reflects year-over-year growth of 48.2%.

Earnings Whispers

Our proven model does not conclusively show that DTE Energy will beat estimates 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. But that is not the case here, as you will see below.

Zacks ESP: DTE Energy has an Earnings ESP of -0.28%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: DTE Energy carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) while going into an earnings announcement.

Stocks That Warrant a Look

Here are some utility companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

NiSource, Inc. (NYSE:NI) has an Earnings ESP of +1.45% and a Zacks Rank #3. It is slated to report upcoming quarter results on Feb 20. You can see the complete list of today’s Zacks #1 Rank stocks here.

CenterPoint Energy, Inc. (NYSE:CNP) has an Earnings ESP of +2.65% and a Zacks Rank #2. It is slated to report quarterly results on Feb 22.

Public Service Enterprise Group (NYSE:PEG) has an Earnings ESP of +0.72% and a Zacks Rank #2. It is slated to report quarterly results on Feb 23.

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