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Is a Beat in the Offing for Enbridge (ENB) in Q4 Earnings?

Zacks Equity Research

Enbridge Inc. ENB is scheduled to release fourth-quarter 2019 results on Feb 14, before the opening bell.

In the last reported quarter, it came up with earnings per share of 42 cents, meeting the Zacks Consensus Estimate on higher throughput in the Mainline System. The midstream energy company beat earnings estimates thrice and met the same once in the trailing four quarters, with the average positive surprise being 11.3%.

Enbridge Inc Price and EPS Surprise

Enbridge Inc Price and EPS Surprise

Enbridge Inc price-eps-surprise | Enbridge Inc Quote

Let’s see how things have shaped up prior to the announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings of 50 cents has seen two upward revisions and no downward movement in the past 30 days. The figure suggests a year-over-year increase of 2%.

Further, the Zacks Consensus Estimate for revenues is pegged at $9.5 billion for the quarter, indicating a rise of 8.9% from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Enbridge this time around. This is because it has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Enbridge has an Earnings ESP of +2.26%. This is because the Most Accurate Estimate is pegged at 51 cents, higher than the Zacks Consensus Estimate of 50 cents per share.

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

Zacks Rank: It currently carries a Zacks Rank #3.

Factors Driving the Better-Than-Expected Earnings

Enbridge — which transports around 25% of the crude oil produced in North America — has the longest and most advanced crude and liquids pipeline system in the world that spreads across 17,108 miles. Owing to these extensive networks of midstream properties, the company is likely to have generated stable fee-based revenues in fourth-quarter 2019.

Enbridge’s Stratton Ridge project, which connects producers in shale plays to train 3 for Freeport LNG, came online in 2019. This is expected to have led to a year-over-year improvement in profit levels. Moreover, it is expected to have earned significant cash flow in the to-be-reported quarter from the natural gas utility business in North America.

Other Stocks to Consider

Some other energy stocks with the perfect mix of elements to beat on earnings in the upcoming quarterly releases are:

Cenovus Energy Inc. CVE has an Earnings ESP of +9.65% and a Zacks Rank #3. The company is set to release quarterly earnings on Feb 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP SUN has an Earnings ESP of +3.35% and a Zacks Rank #1. The company is set to release quarterly earnings on Feb 19.

Continental Resources, Inc. CLR has an Earnings ESP of +2.79% and a Zacks Rank #3. The company is set to release quarterly earnings on Feb 26.

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