Fortis (FTS) Expected to Beat Earnings Estimates: What to Know Ahead of Q1 Release

The market expects Fortis (FTS) to deliver flat earnings compared to the year-ago quarter on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 7. On the other hand, if they miss, the stock may move lower.While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.Zacks Consensus EstimateThis electric and gas utility is expected to post quarterly earnings of $0.69 per share in its upcoming report, which represents no change from the year-ago quarter.Revenues are expected to be $2.38 billion, up 2.9% from the year-ago quarter.Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 3.09% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).How Have the Numbers Shaped Up for Fortis?For Fortis, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.23%.On the other hand, the stock currently carries a Zacks Rank of #2.So, this combination indicates that Fortis will most likely beat the consensus EPS estimate.Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.For the last reported quarter, it was expected that Fortis would post earnings of $0.57 per share when it actually produced earnings of $0.59, delivering a surprise of +3.51%.Over the last four quarters, the company has beaten consensus EPS estimates four times.Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.Fortis appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.An Industry Player's Expected ResultsAmerican Electric Power (AEP), another stock in the Zacks Utility - Electric Power industry, is expected to report earnings per share of $1.39 for the quarter ended March 2025. This estimate points to a year-over-year change of +9.5%. Revenues for the quarter are expected to be $5.34 billion, up 6.7% from the year-ago quarter.The consensus EPS estimate for AEP has been revised 13.4% higher over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of 0.54%.This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that AEP will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.Should You Invest in Fortis (FTS)?Before you invest in Fortis (FTS), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fortis (FTS): Free Stock Analysis Report American Electric Power Company, Inc. (AEP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks