Will Expanding Customer Base Aid NiSource (NI) Q4 Earnings?

We expect NiSource Inc. (NYSE:NI) to beat expectations when it reports fourth-quarter 2017 results on Feb 20, before the opening bell. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate.

Why a Likely Positive Surprise?

Our proven model shows that NiSource is likely to beat estimates because it has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates.

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

Zacks ESP: The company’s Earnings ESP is +1.45% as the Most Accurate Estimate of 33 cents is better than the Zacks Consensus Estimate by a penny.

Zacks Rank: NiSource carries a Zacks Rank #3. The combination of the company’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.

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

Factors to Consider

For the fourth quarter, the Zacks Consensus Estimate for NiSource’s revenues is pegged at $1,352 million, reflecting a year-over-year increase 4.2%. NiSource has a 100% regulated utility business model.

We anticipate that the increase in total revenues will be driven by the investment in capital projects, new rates in gas operations, improvements to its electric generating stations and strengthening its existing infrastructure.

NiSource is expected to gain from new home construction and conversion to natural gas in its service territories that are helping to expand the existing customer base of the company.

Other Stocks to Consider

NiSource is not the only company in the industry looking up this earnings season. We can expect earnings beats from these companies as well.

Public Service Enterprise Group Incorporated (NYSE:PEG) has an Earnings ESP of +0.72%. It has a Zacks Rank #2 and is expected to report fourth-quarter 2017 earnings on Feb 23. 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%. It carries Zacks Rank #2 and is anticipated to report fourth-quarter 2017 earnings on Feb 22.

Pinnacle West Capital Corporation (NYSE:PNW) has an Earnings ESP of +12.20%. The company has a Zacks Rank #3 and is expected to report fourth-quarter 2017 earnings on Feb 23.

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