Calpine Expected to Outperform 4Q - Analyst Blog
12 Fevereiro 2013 - 4:02PM
Zacks
We expect utility company Calpine Corporation
(CPN) to beat expectations when it reports fourth-quarter 2012
results on Feb 13, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Calpine Corporation is likely to beat
earnings because it has the right combination of key factors.
Positive Zacks ESP: Expected Surprise Prediction
or ESP (Read: Zacks Earnings ESP: A Better Method), which
represents the difference between the Most Accurate estimate and
the Zacks Consensus Estimate, is at +100.00%. This is meaningful
and a leading indicator of a likely positive earnings surprise for
this company.
Zacks #3 Rank (Hold): We note that stocks with
Zacks Ranks of #1, 2 and 3 have a significantly higher chance of
beating earnings. The Sell-rated stocks (#4 and 5) should never be
considered going into an earnings announcement.
The combination of Calpine Corporation’s Zacks Rank #3 (Hold) and
+100.00% ESP makes us confident of a positive earnings beat this
announcement.
Earnings Drivers
Calpine Corporation’s steady capital investment program in several
growth projects along with divesture of non-performing assets,
portfolio realignment and cost-curtailment initiatives are expected
to drive earnings.
The company continues to restructure its generation portfolio by
hiving off assets and adding new properties. Calpine Corporation
received $392 million in 2012 by selling its Riverside Energy
Center to a unit of Alliant Energy Corporation
(LNT). We expect these transactions along with an 800-megawatt
Californian growth project to help Calpine Corporation meet the
growing demand from Texas and Delaware.
The positive trend is seen in the trailing four quarter average
surprise of 42.96%. Calpine Corporation’s third-quarter 2012
surprise was 9.52%. Benefits from acquisitions, asset realignment
and a strong cash position aided the surprise.
Other Stocks to Consider
Calpine Corporation is not the only organization looking up this
earnings season. We also expect other utility providers to beat
earnings.
Ormat Technologies Inc. (ORA), earnings ESP of
+50.00% and Zacks Rank #2 (Buy).
PPL Corporation (PPL), earnings ESP of +2.17% and
Zacks Rank #3 (Hold).
CALPINE CORP (CPN): Free Stock Analysis Report
ALLIANT ENGY CP (LNT): Free Stock Analysis Report
ORMAT TECH INC (ORA): Free Stock Analysis Report
PPL CORP (PPL): Free Stock Analysis Report
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