Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

PG&E Corp. (PCG - Analyst Report) is set to report its second quarter 2013 results on Jul 31, 2013. Last quarter, the company posted a 10% negative surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

PG&E Corporation has a solid portfolio of regulated utility assets that offer a stable earnings base and substantial long-term growth potential. The company strives to optimize generation margins by improving its cost structure, performance and reliability of its nuclear as well as fossil units.

Going forward, we expect the company’s earnings growth to be driven by favorable decisions from California Public Utilities Commission (CPUC) and Federal Energy Regulatory Commission, as well as long-term supply agreements, diversification into alternative power sources and infrastructure improvement programs resulting in rate base growth.

PG&E Corporation operates in the regulatory progressive state of California. The CPUC provides the company with ample regulatory support through progressive mechanisms like decoupling that insulates the top line of the company from risks arising out of lower customer usage, weather vagaries and volatility in prices to some extent.

However, the present unfavorable macro backdrop, tepid demand for electricity, any accidental charges or any severe fluctuation in prices keep us concerned.

Earnings Whispers?

Our proven model does not conclusively show that PG&E Corp. is likely to beat earnings this quarter. That is because a stock needs to have both a positive Zacks earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP: The Zacks ESP is 0.0%.

Zacks Rank #3 (Hold): PG&E Corp. carries a Zacks Rank #3 (Hold). However, the Zacks Rank #3 when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement.

Other Stocks to Consider

Here are some other companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

IdaCorp, Inc. (IDA - Snapshot Report), with Earnings ESP of +17.65% and a Zacks Rank #2 (Buy).

UIL Holdings Corporation (UIL - Snapshot Report), with Earnings ESP of +3.70% and a Zacks Rank #2 (Buy).

FirstEnergy Corp. (FE - Analyst Report), with Earnings ESP of +5.66% and a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%