The Q2 earnings cycle is gaining speed, with as many as 1000 companies, including 189 S&P 500 members, lining up to release quarterly numbers by the end of this week. As of last Friday, 32.7% of the market cap of the S&P 500 index had reported results.

Reported results reveal a 1.1% decline in second-quarter earnings on 2.6% higher revenues. Overall earnings are anticipated to record a 3.4% decline on 0.5% lower revenues, with 9 of the 16 Zacks sectors witnessing growth in the negative territory. The picture should become clearer by the end of this week after the majority releases results. For more details, you may go through our Earnings Trends report.

As far as the clean energy space is concerned, environmental considerations have been propelling demand to a large extent for alternative sources of energy. In fact, both solar and wind energy got a major boost from the environmental tax credit extensions in Dec 2015.

The U.S. Energy Information Administration (“EIA”) anticipates total renewables used in the electric power sector to increase 11.2% in 2016. The EIA also projects utility-scale solar photovoltaic (“PV”) capacity to increase by nearly 13 gigawatts (“GW”) in the 2015–2017 period. Wind capacity is forecasted to grow by 10% in 2016 and will account for 6% of the total electricity generation in 2017.

These favorable demand growth trends notwithstanding, abundant availability of fossil fuels and the fluctuations in oil prices have emerged as key competitive challenges for this industry. Nevertheless, the long-term fundamentals remain favorable.

Let’s take a look at a couple of clean energy stocks that are scheduled to report second-quarter earnings on Jul 27.

Pacific Ethanol, Inc. is currently in the business of marketing ethanol in the Western U.S. through Kinergy Marketing, a wholly-owned subsidiary of the company and the largest West Coast-based marketer of renewable fuels. The company intends to construct an ethanol production facility at its Madera County, CA site shortly. Note that ethanol is the most common biofuel worldwide.

This Zacks Rank #3 (Hold) stock, which has an Earnings ESP of 100.00. Last quarter, the company posted a negative earnings surprise of 153.85%.

During its first-quarter earnings call, Pacific Ethanol said that it had witnessed remarkable improvement margin in the beginning of the second quarter owing to lower industry-wide production levels and record demand of ethanol. The company is also optimistic on long-term demand for ethanol and co-products, and is on-track to market over 800 million gallons of ethanol in 2016.
 

NextEra Energy Partners, LP (NEP Quick QuoteNEP - Free Report) is engaged in owning, operating and acquiring contracted clean energy projects. It owns interests in wind and solar projects primarily in North America. Last quarter, NextEra Energy Partners posted a negative earnings surprise of 57.58%. It carries a Zacks Rank #3 and has an Earnings ESP of 3.13%.

During the first-quarter conference call, the partnership said that it is positive about its full-year performance based on strong first-quarter results. Acquisition of the Seiling I & II projects during the first quarter is expected to benefit it through the rest of the year. NextEra Energy Partners also provided its outlook for 2016 wherein adjusted earnings are anticipated in the range of $5.85−$6.35 per share, reflecting average annual growth of 12−15%.
 

Bottom Line

Given the number of S&P 500 earnings releases scheduled for this week, investors are expected to keep an eye on the earnings releases by these clean energy companies.

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