Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Enbridge (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.
Stats on Enbridge
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
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's (NYSE: TRP ) 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 (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 (NYSE: UNP ) , Canadian Pacific (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.
Will Enterprise outpace Enbridge?
Enterprise Products Partners may be Enbridge's partner on the Seaway Pipeline, but with a superior asset base, Enterprise has plenty of potential in helping eliminate the massive bottlenecks in takeaway capacity. Let me invite you to look at our premium report on Enterprise, in which we examine big projects in its backlog and their potential for huge profit growth. Click here now to access your report instantly.
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