Earnings Preview: What to Expect When Enbridge Inc. Reports Tomorrow

Can Enbridge deliver for shareholders this quarter?

| More on:
The Motley Fool

Enbridge (TSX: ENB)(NYSE: ENB) is scheduled to post its second-quarter earnings report on Friday. The Canadian pipeline giant is in the midst of a major expansion as the company scrambles to accommodate surging oil production across North America. However, with the stock soaring to all-time highs, investors have to watch quarter by quarter to ensure that the company can deliver on its promise.

Let’s take a peek at what has been happening at Enbridge over the past few months and what we can expect in the upcoming report.

Stats on Enbridge

Analysts’ EPS Estimate $0.39
Year-Ago EPS $0.38
Revenue Estimate $7.53B
Change From Year-Ago Revenue -4.10%
Earnings Beats in Past Four Quarters 1

Source: Yahoo! Finance

Can Enbridge deliver for shareholders this quarter?

Analysts have been steadfast in their views of Enbridge’s earning prospects. Over the past three months, they have lowered their consensus profit estimate for the upcoming quarter and the full fiscal year by a penny. The stock, meanwhile, has continued to soar, up nearly 5% since the end of April.

Enbridge is in the midst of one of the largest expansions in the company’s history. Thanks to new technologies like steam-assisted gravity drainage and horizontal drilling, the amount of energy currently being pulled from oil fields across the country is only a tiny fraction of what’s to come.

According to the Canadian Association of Petroleum Producers, oil sands production is forecast to more than double by 2030 to 4.8 million barrels per day. New estimates by the U.S. Energy Information Agency and other industry trade groups predict that America’s shale revolution is only in the early innings of its expansion.

Companies that will collect, ship, and store all of this new energy production are positioned to make a fortune — and Enbridge is poised to do exactly that.

The company has a remarkable $42 billion in growth projects — more than 100% of its current market capitalization — on the books. This includes thousands of miles of new pipeline, dozens of needed storage facilities, and additional green power generation capacity. Investors are likely to be rewarded for years to come given the company’s backlog of growth projects, steady cash flows, and increasing distribution.

In Enbridge’s upcoming quarter, listen for hints of new expansion opportunities. Earlier this month, reports surfaced that the company was mulling a railing terminal in the midwest to ease pipeline congestion. New growth initiatives like this could be a hidden catalyst for the stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned.

More on Investing

Aerial view of a wind farm
Energy Stocks

Is There Any Hope for Brookfield Renewable Stock?

Brookfield Renewable stock (TSX:BEP.UN) may be going through a rough patch, but recent moves suggest more is yet to come.

Read more »

Growing plant shoots on coins
Dividend Stocks

Better Buy in August: Passive-Income or Growth Stocks?

With a steady mix of passive-income and growth stocks, investors can create a prime portfolio even during market volatility.

Read more »

Woman has an idea
Stocks for Beginners

Why Canadian Investors Should Consider Investing in U.S. Stocks

In my opinion, U.S. stocks should be a large component of a Canadian investment portfolio.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

The Smartest TSX Growth Stocks to Buy in July 2024

If you are looking for some smart growth stocks, here are four to look at right now.

Read more »

a person prepares to fight by taping their knuckles
Dividend Stocks

3 Defensive TSX Stocks for Lower-Risk Investors

These three TSX stocks are all high-quality companies with defensive businesses, making them ideal for low-risk investors.

Read more »

Paper Canadian currency of various denominations

Where to Invest $10,000

These companies have strong fundamentals with the potential to deliver solid capital gains.

Read more »

healthcare pharma

Up 23% This Year, Is WELL Health Technologies a Good Stock to Buy Right Now?

Given its long-term growth prospects and attractive valuation, WELL Health's uptrend could continue.

Read more »

ETF chart stocks
Dividend Stocks

2 Canadian ETFs to Buy and Hold Forever in Your TFSA

ETFs like iShares Canadian Quality Dividend ETF (TSX:DIV) have delivered admirable total returns.

Read more »