El Paso Electric Company (EE) has surprised on estimates four quarters in a row by an average of 19.23%. The company has attractive valuations. It is trading at 12.9x forward earnings.
Company Description
El Paso Electric produces electricity for about 360,000 customers in the Rio Grande Valley in west Texas and southern New Mexico.
El Paso Surprised in the Third Quarter by 15.15%
On Oct 29, El Paso reported third quarter results which beat the Zacks Consensus by 10 cents per share. Earnings per share were 76 cents, or 2 cents better than the year ago period. Analysts had been expecting just 66 cents.
Retail non-fuel base revenues rose 8.1% compared to the year ago period due mainly to a 13.6% increase in kWh sales to residential customers. Hotter weather boosted kWh sales to residential customers in the quarter.
The company repurchased 751,235 shares in the quarter for a total cost of $12.9 million. There were no shares repurchased in either the first or the second quarters.
2009 Guidance Raised
El Paso Electric adjusted its 2009 earnings guidance by narrowing the lower end of its guidance range to $1.35 from $1.00 and raising the upper end by 5 cents to $1.55.
Zacks Consensus Estimates Jump
In response to the company adjusting their guidance range and posting yet another earnings beat, covering analysts raised 2009 estimates to $1.55 from $1.37 per share in the last 30 days.
1 analyst also raised the 2010 estimate in the last week as the Zacks Consensus moved higher by 2 cents to $1.60 per share.
Value Fundamentals
El Paso Electric is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 12.9. The company has a solid 5-year average return on equity (ROE) of 10.52%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
