We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Utility Stock Earnings to Watch on Oct 31: NEE, SO, D, PEG
Read MoreHide Full Article
The Q3 earnings season is picking up pace with 198 S&P 500 members having already released results. Reported earnings were up 3.2% year over year on 1.9% higher revenues.
For the remaining 302 index members, projections are of a 1.4% improvement in earnings on 1.4% higher revenues despite the expectations of a 71% plunge in earnings on 12.2% deterioration in revenues for the Oil & Energy sector. Notably, this could be the first quarter to record positive earnings growth after five quarters of back-to-back declines.
Five out of the 16 sectors in the Zacks coverage universe are expected to witness earnings decline this season. However, utility is among the remaining 11 sectors that are expected to record positive growth this season. Read more details in our weekly Earnings Preview report.
Let us now focus on the utility sector, which is characterized by its defensive nature and domestic orientation.
Stringent emission control laws have spurred the demand for clean burning sources of energy like natural gas and renewables, lowering the usage of coal in electricity production. Per recent projections by the U.S. Energy Information Administration (EIA), the share of natural gas in the electricity generation mix will increase to nearly 35% in 2016, reflecting growing preference for the fuel.
The utility sector is also known for its capital-intensive nature. This is because these companies need huge capital for setting up generation facilities, and transmission and distribution infrastructure. They also require considerable funds for upgrading the existing systems to meet emission control standards.
Because of this, utilities have been benefiting from the rock-bottom interest rate environment. However, talks hinting at a rate hike before the end of the year could hamper the growth momentum of the sector. Nevertheless, we expect warmer-than-normal weather in the U.S. during the third quarter to boost sales to a large extent.
In the third quarter of 2016, sector earnings are expected to be up 9.1% on 5.2% higher revenues.
Let’s take a look at a few utilities that are scheduled to report quarterly numbers on Oct 31.
NextEra Energy’s Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.65.
According to our proven model, stocks with the combination of a Zacks Rank #1, #2 (Buy) or #3 and a positive ESP have increased chances of beating estimates. (Read more: NextEra Energy Q3 Earnings: Will the Stock Surprise?)
Dominion Resources, Inc. (D - Free Report) , another Zacks Rank #3 stock, reported in-line earnings last quarter.
Dominion Resources has an Earnings ESP of +0.96% as the Most Accurate Estimate is pegged at $1.05, while the Zacks Consensus Estimate stands at $1.04. However, earlier, an earnings beat had been uncertain according to our model. (Read more: What's in the Cards for Dominion this Earnings Season?)
Public Service Enterprise Group Inc. (PEG - Free Report) reported in-line earnings last quarter.
This Zacks Rank #3 company’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 81 cents. (Read more: Public Service Enterprise Q3 Earnings: What's Up?)
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right now >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Utility Stock Earnings to Watch on Oct 31: NEE, SO, D, PEG
The Q3 earnings season is picking up pace with 198 S&P 500 members having already released results. Reported earnings were up 3.2% year over year on 1.9% higher revenues.
For the remaining 302 index members, projections are of a 1.4% improvement in earnings on 1.4% higher revenues despite the expectations of a 71% plunge in earnings on 12.2% deterioration in revenues for the Oil & Energy sector. Notably, this could be the first quarter to record positive earnings growth after five quarters of back-to-back declines.
Five out of the 16 sectors in the Zacks coverage universe are expected to witness earnings decline this season. However, utility is among the remaining 11 sectors that are expected to record positive growth this season. Read more details in our weekly Earnings Preview report.
Let us now focus on the utility sector, which is characterized by its defensive nature and domestic orientation.
Stringent emission control laws have spurred the demand for clean burning sources of energy like natural gas and renewables, lowering the usage of coal in electricity production. Per recent projections by the U.S. Energy Information Administration (EIA), the share of natural gas in the electricity generation mix will increase to nearly 35% in 2016, reflecting growing preference for the fuel.
The utility sector is also known for its capital-intensive nature. This is because these companies need huge capital for setting up generation facilities, and transmission and distribution infrastructure. They also require considerable funds for upgrading the existing systems to meet emission control standards.
Because of this, utilities have been benefiting from the rock-bottom interest rate environment. However, talks hinting at a rate hike before the end of the year could hamper the growth momentum of the sector. Nevertheless, we expect warmer-than-normal weather in the U.S. during the third quarter to boost sales to a large extent.
In the third quarter of 2016, sector earnings are expected to be up 9.1% on 5.2% higher revenues.
Let’s take a look at a few utilities that are scheduled to report quarterly numbers on Oct 31.
NextEra Energy Inc. (NEE - Free Report) reported a positive earnings surprise of 5.70% last quarter. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NextEra Energy’s Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.65.
According to our proven model, stocks with the combination of a Zacks Rank #1, #2 (Buy) or #3 and a positive ESP have increased chances of beating estimates. (Read more: NextEra Energy Q3 Earnings: Will the Stock Surprise?)
NEXTERA ENERGY Price and EPS Surprise
NEXTERA ENERGY Price and EPS Surprise | NEXTERA ENERGY Quote
Southern Company (SO - Free Report) reported a positive earnings surprise of 7.25% last quarter. The company currently carries a Zacks Rank #3.
Southern Company’s Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.17. (Read more: Will Southern Company Q3 Ruin the Earnings Streak?)
SOUTHERN CO Price and EPS Surprise
SOUTHERN CO Price and EPS Surprise | SOUTHERN CO Quote
Dominion Resources, Inc. (D - Free Report) , another Zacks Rank #3 stock, reported in-line earnings last quarter.
Dominion Resources has an Earnings ESP of +0.96% as the Most Accurate Estimate is pegged at $1.05, while the Zacks Consensus Estimate stands at $1.04. However, earlier, an earnings beat had been uncertain according to our model. (Read more: What's in the Cards for Dominion this Earnings Season?)
DOMINION RES VA Price and EPS Surprise
DOMINION RES VA Price and EPS Surprise | DOMINION RES VA Quote
Public Service Enterprise Group Inc. (PEG - Free Report) reported in-line earnings last quarter.
This Zacks Rank #3 company’s Earnings ESP is 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 81 cents. (Read more: Public Service Enterprise Q3 Earnings: What's Up?)
PUBLIC SV ENTRP Price and EPS Surprise
PUBLIC SV ENTRP Price and EPS Surprise | PUBLIC SV ENTRP Quote
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Confidential: Zacks' Best Investment Ideas
Would you like to see a hand-picked "all-star" selection of investment ideas from the man who heads up Zacks' trading and investing services? Steve Reitmeister knows when key trades are about to be triggered and which of our experts has the hottest hand. Click for his selected trades right now >>