Entergy Corporation (NYSE:ETR) will release first-quarter 2016 financial results before the opening bell on Apr 26. The company had reported a positive earnings surprise of 2.60% in the previous quarter. Let’s see how things are shaping up prior to this announcement.
Factors at Play
As revealed during the fourth-quarter 2015 earnings call, Entergy expects operational earnings of around $1.10 per share, which reflects a 10.6% decline from the Zacks Consensus Estimate of $1.23 and is down 34.5% from the year-ago quarter profit level of $1.68.
The company considers milder weather experienced this year, including the 7-cent per share of negative effect already felt in January, to affect the quarter’s profits. Entergy does not anticipate any significant tax item in the first quarter.
Earnings Whispers
Our proven model does not conclusively show that Entergy is likely to beat on earnings this quarter as it lacks the key components. 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 not the case here as you will see below:
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently -4.88%.
Zacks Rank: Entergy’s Zacks Rank #3 when combined with negative ESP makes an earnings beat prediction uncertain.
The Sell-rated stocks (#4 or 5) should never be considered going into an 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 as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Spark Energy, Inc. (NASDAQ:SPKE) has an earnings ESP of +53.57% and a Zacks Rank #1. The company will likely report first-quarter results on May 11.
TELUS Corporation (NYSE:TU) has an earnings ESP of +10.00% and a Zacks Rank #2. The company will report first-quarter results on May 5.
BCE Inc. (TO:BCE) has an earnings ESP of +1.54% and a Zacks Rank #2. The company will report first-quarter results on Apr 28.
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ENTERGY CORP (ETR): Free Stock Analysis Report
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