Accuracy of earnings forecasts for public utilities

Journal Article · Thu Nov 23 04:00:00 EST 1978 · Public Util. Fortn.; (United States)

OSTI ID:6178480

Fraser, D R; Richards, M

This article evaluates professional security analysts' forecasts of the earnings of public utilities for a three-year period, 1975-77. The pedictability of such earnings should be of interest to management within the industry as well as to investors and to state regulatory commissions since earnings stablity and changes in earnings stability over time are reflections of the fundamental riskiness of this type of business. Comparisons are also made between the forecast errors associated with earnings forecasts for public utilities and the errors associated with forecasts for a number of other industries. Additionally, the accuracy of forecasts for three different types of public utilities--telephone, natural gas, and electric utilities--is considered. In the present study the earnings forecast made by security analysts for public utilities for three separate years (1975, 1976, and 1977) were gathered and compared with actual earnings for the respective years. Data were obtained for 35 separate utiliy firms and it is concluded that the economic, financial, and regulatory environment has changed to the extent that the eanings of public utilities are no more predictable than the earnings in other unregulated industris.

• Research Organization: Texas A and M Univ, College Station
• OSTI ID: 6178480
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 102:11; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
ACCURACY
COMMUNICATIONS
COMPARATIVE EVALUATIONS
ELECTRIC UTILITIES
ERRORS
FORECASTING
GAS UTILITIES
INCOME
INDUSTRY
MANAGEMENT
PUBLIC UTILITIES
REGULATIONS
RISK ASSESSMENT
TELEPHONES