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Xcel Energy (XEL) Q3 Earnings: What's in Store for the Stock?

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Xcel Energy Inc. (XEL - Free Report) is slated to report third-quarter 2017 results before the market opens on Oct 26. In the second quarter, the company reported a positive earnings surprise of 4.65%. Let’s see how things are shaping up for this earnings season.

Factors to Consider

Xcel Energy continues to invest in its utility assets to provide reliable services to its customers and effectively meet rising electricity demand.

For the third quarter, the Zacks Consensus Estimate for Xcel Energy’s revenues is pegged at $3,284 million, indicating 10.8% year over year and 23.8% sequential increase. We expect the increase in total revenues to be driven by higher contribution from its Electric segment.

Economic growth in its service territories, especially in Minnesota and systematic investment in regulated operation is expected to boost the bottom line. Xcel Energy’s focus to produce more electricity from renewable sources will also yield positive results. Earnings are projected to be 93 cents per share, reflecting year-over-year growth of 6.9%.

Notably, shares of Xcel Energy have gained 5.5% in the last three months, outperforming the industry’s 4.4% rally.

Xcel Energy Inc. Price and EPS Surprise

 

Xcel Energy Inc. Price and EPS Surprise | Xcel Energy Inc. Quote

Earnings Whispers

Our proven model does not conclusively show that Xcel 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 -0.09%.
 
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Xcel 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 in 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 - Free Report) is expected to release third-quarter 2017 results on Nov 1. The company has an Earnings ESP of +2.89% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NiSource Inc. (NI - Free Report) 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.

Avista Corporation (AVA - Free Report) has an Earnings ESP of +17.24% and a Zacks Rank #3. The company is expected to release third-quarter 2017 results on Nov 1.

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