With hundreds of companies having already reported quarterly results, we're now in the heart of earnings season. 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.

Let's turn to Spectra Energy (NYSE:SE). The company owns and operates natural gas storage and transmission facilities, with capacity to handle both dry gas and natural gas liquids, but its stock has been stuck in the doldrums for a while now. Let's take an early look at what's been happening with Spectra Energy over the past quarter and what we're likely to see in its quarterly report Tuesday.

Stats on Spectra Energy

Analyst EPS Estimate


Change from Year-Ago EPS


Revenue Estimate

$1.40 billion

Change from Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo Finance.

Can Spectra Energy make its stock more energetic?
Analysts have gotten Spectra wrong four straight times, and they don't have much confidence this time around. Over the past three months, they've marked down their earnings-per-share estimates by $0.07, and the stock has also struggled, falling very slightly since early November.

There's nothing terribly complicated about Spectra's business. The company's job is to take the natural gas that exploration and production companies find and deliver it to customers for commercial and residential use. Given the boom in the gas industry lately, Spectra has had plenty of opportunities, even though low gas prices have led to many producers cutting back on exploration activity recently.

One big source of future growth for Spectra, though, could come from its new projects to add to its capacity over the next several years. One big project involves its 50% ownership in the DCP Midstream (NYSE:DCP) joint venture, which is working to link the Eagle Ford and Permian regions to existing infrastructure in the Mont Belvieu area in eastern Texas. With Phillips 66 (NYSE:PSX) as its other partner, Spectra could see big gains from the DCP venture, despite DCP's stock having performed terribly in 2012.

Spectra also picked up a lucrative asset from Kinder Morgan Energy Partners (UNKNOWN:KMP.DL) during the quarter, a one-third interest in the Express-Platte pipeline system. For Kinder Morgan, the move frees up cash for higher-return projects, but Spectra can use the pipeline to build out its national infrastructure.

In its quarterly report, investors should look for Spectra to share its views on the future of natural gas and its role in distribution. With increased talk of exporting natural gas to take advantage of higher prices overseas, Spectra could be vital in providing the links between gas fields and final markets around the world.

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