Public Service Enterprise Group Inc. (PEG Quick QuotePEG - Free Report) is scheduled to report third-quarter 2016 results before the opening bell on Oct 31.

Last quarter, the utility’s earnings were in line with estimates. Moreover, Public Service Enterprise has outperformed the Zacks Consensus Estimate in three out of the trailing four quarters, the average positive surprise being 1.92%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Unexpected extension of a refueling outage at the Salem 1 and 2 nuclear power plants in the third quarter will result in lower-than-expected electricity production. This could also have an adverse impact on the company’s top line.

Moreover, environmental regulations related to emissions produced by fossil fuel-fired plants might lead to an increase in the company’s compliance-related costs. These factors could hurt its financial performance and limit profitability.

On a brighter note, during the second-quarter earnings call, the company said that its strong capital program will make more meaningful contributions to the bottom line in the second half of the year, especially in the third quarter. An increase in energy-related spending and the nature of rate structure driving demand will be the growth catalysts during the quarter.

Weather too will play an important role during the to-be-reported quarter. With temperatures marginally higher than normal, demand for utility services are expected to will get a boost.

Overall, for the third quarter, the Zacks Consensus Estimate for earnings stands at 82 cents, reflecting a year-over-year increase of 3%, while that for revenues is pegged at $2.54 billion, translating into a 5.4% decline.

Earnings Whispers

Our proven model does not conclusively show that Public Service Enterprise is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -1.22%. This is because the Most Accurate estimate stands at 81 cents, while the Zacks Consensus Estimate is pegged higher at 82 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Zacks Rank: Though Public Service Enterprise’s Zacks Rank #3 increases the predictive power of ESP, we need a positive ESP to be confident about an earnings beat.

Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

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

Pattern Energy Group Inc. is expected to release third-quarter results on Nov 3. The company has an Earnings ESP of +16.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AES Corporation (AES Quick QuoteAES - Free Report) has an Earnings ESP of +5.88% and a Zacks Rank #3. It is expected to report earnings on Nov 4.

Hawaiian Electric Industries Inc. (HE Quick QuoteHE - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #3. The company is expected to release third-quarter 2016 earnings on Nov 4.

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