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DTE Energy (DTE): Stock to Disappoint in Q1 Earnings?

DTE Energy DTE will release first-quarter 2016 financial results before the market opens on Apr 26. In the prior quarter, this diversified utility company reported a positive earnings surprise of 4.12%. Let’s see how things are shaping up at the company prior to this announcement.

Factors to Consider This Quarter

DTE Energy expects to register earnings growth in the range of 5% to 6% in 2016 from the 2015 level. However, the warmer-than-expected winter might adversely impact its prospects in the first quarter of 2016.

The unemployment rate in DTE Energy’s service territories is marginally better than the national average, which will definitely boost the company’s performance once the worries related to the Super El Nino disrupting weather patterns pass.

Surprise History

 

The above chart indicates that DTE Energy generated positive earnings surprises in three out of the last four quarters. The average earnings surprise was 5.02%.

Earnings Whispers

Our proven model does not conclusively show that DTE Energy is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here.

Zacks ESP: The Most Accurate estimate stands at $1.51 while the Zacks Consensus Estimate is pegged at $1.54, resulting in -1.95% ESP.

Zacks Rank: Though DTE Energy’s Zacks Rank #3 increases the predictive power of ESP, its -1.95% ESP makes a beat unlikely this quarter.

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

Stocks to Consider

Let us focus on some other players in the utility space, which have the right combination of elements to post an earnings beat this quarter.

BCE Inc. BCE has an Earnings ESP of +1.56% and a Zacks Rank #2. It is slated to report earnings on Apr 28.

National Fuel Gas Company NFG has an Earnings ESP of +4.17% and a Zacks Rank #3. It is expected to report earnings after the market closes on Apr 29.

IdaCorp, Inc. IDA has an Earnings ESP of +7.27% and a Zacks Rank #3. It is expected to report earnings on Apr 28.

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DTE ENERGY CO (DTE): Free Stock Analysis Report
 
IDACORP INC (IDA): Free Stock Analysis Report
 
NATL FUEL GAS (NFG): Free Stock Analysis Report
 
BCE INC (BCE): Free Stock Analysis Report
 
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