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What to Expect From Dominion Energy (D) in Q3 Earnings?

Dominion Energy D is slated to report third-quarter 2017 results before the market opens on Oct 30. In the second quarter, the utility company reported a positive earnings surprise of 1.52%. Let’s see how things are shaping up for this earnings season.

Factors to Consider

Dominion Energy expects its earnings in the third quarter to be between 95 cents and $1.15 per share compared with the year-ago quarter earnings of $1.14. The company expects the addition of Questar operation to drive earnings in the quarter.

However, earnings are expected to be adversely impacted by return to normal weather, lower earnings from Cove Point, higher PJM's electric capacity expenses and lower investment tax credits from solar investments.

For the third quarter, the Zacks Consensus Estimate for total revenues is $3,327 million, reflecting 6.3% increase year over year. Dominion Energy continues to expand its solar generation facility through acquisitions and reap benefits of green energy generation. Acquisitions made in the quarter are helping the company to further expand its solar generating capacity, which presently is 2,000 megawatt.

Earnings Whispers

Our proven model does not conclusively show that Dominion Energy is likely to beat earnings this quarter as it does not possess 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. However, that is not the case here as you will see below.

Zacks ESP: The company’s Earnings ESP is -0.22%.
 
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Dominion Energy’s Zacks Rank #3, when combined with a negative Earnings ESP makes a beat unlikely this quarter.

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 a negative estimate revisions momentum.

Stocks to Consider

Here are some companies from the industry that you may want to consider instead, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

ALLETE Inc. ALE is expected to release third-quarter 2017 results on Nov 1. The company has an Earnings ESP of +2.89% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

NiSource Inc. NI has an Earnings ESP of +7.69% and a Zacks Rank #2. The company is expected to release third-quarter 2017 results on Nov 1.

Exelon Corporation EXC has an Earnings ESP of +1.16% and a Zacks Rank #3. The company is expected to release third-quarter 2017 results on Nov 2.

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Exelon Corporation (EXC): Free Stock Analysis Report
 
NiSource, Inc (NI): Free Stock Analysis Report
 
Dominion Energy Inc. (D): Free Stock Analysis Report
 
Allete, Inc. (ALE): Free Stock Analysis Report
 
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