Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Enbridge Inc (USA) (NYSE:ENB) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Many companies in the energy business have struggled lately, but Enbridge has been setting new all-time highs ever since 2010 and continues to soar. Let’s take an early look at what’s been happening with Enbridge over the past quarter and what we’re likely to see in its quarterly report on Friday.
| Analyst EPS Estimate | $0.44 |
| Change From Year-Ago EPS | 19% |
| Revenue Estimate | $6.22 billion |
| Change From Year-Ago Revenue | 14.4% |
| Earnings Beats in Past 4 Quarters | 1 |
Source: Yahoo! Finance.
Will Enbridge remain energetic this quarter?
Enbridge has seen analysts stay relatively stable on the company’s earnings estimates for the quarter, with a drop of a single penny per share over the past three months. But the stock has shown no sign of letting up in its bull run, rising 14% since mid-November on continued optimism.
Enbridge is a pipeline company that has geography on its side, with its extensive pipeline network in Canada and partnerships extending its reach into the U.S. as well. Its location gives it access to major production areas and major projects that include a 125,000 barrel-per-day pipeline connecting its existing network to producers in the Bakken as well as its ambitious Northern Gateway project to go from Alberta’s oil sands region to the western Canadian coast should lead to future growth. The Bakken pipeline could come online early this year, although the Northern Gateway project is mired in controversy that could take years to resolve. Yet given TransCanada Corporation (USA) (NYSE:TRP)‘s failed plans for the Keystone XL pipeline, it’s evident that infrastructure needs to transport energy products across North America are higher than ever.
Enbridge has taken also been taking steps to try to take advantage of higher energy prices elsewhere. By reversing the flow of the Seaway Pipeline that it shares with Enterprise Products Partners L.P. (NYSE:EPD) last year and expanding the pipeline, Enbridge hopes to move cheaper West Texas Intermediate crude to ports on the Gulf of Mexico, where it can be refined and get access to higher prices in the global market for refined products.
At the same time, Enbridge has also turned to unconventional means to move crude from hard-to-reach places, resorting to using a railroad subsidiary to move oil by train. The move is an attack against Union Pacific Corporation (NYSE:UNP), Canadian Pacific Railway Limited (USA) (NYSE:CP), and other railroads, which have jumped at the chance to provide rail transport for crude.
In Enbridge’s earnings report, the keys to look for are signs of any headway on future projects. With so much need for new pipelines, Enbridge simply has to break the regulatory logjam and get the go-ahead to take advantage of huge demand for its network.
The article Enbridge Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Enterprise Products Partners.
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