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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).

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