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 Q1 Earnings Reports Due on May 5: CNP, NJR, HE
Read MoreHide Full Article
We are approaching the close of first-quarter 2017 reporting cycle, with nearly 71.6% or 358 S&P 500 members having released their earnings reports as of May 3, 2017. Reported earnings were up 12.9% year over year on 7.9% higher revenues. Among them, 74.3% beat EPS estimates while 65.9% beat revenue estimates.
For the remaining 142 index members (combined with the already reported 358 index members), earnings are estimated to improve 11.9% on 6.2% higher revenues this season. The trend of earnings releases indicates that this could be the third straight quarter to record earnings growth after five back-to-back quarters of decline.
Let us now focus on the utility sector, which is characterized by its defensive nature and domestic orientation.
The utility sector is also known for its capital-intensive nature. This is because these companies need huge capital to set up generation facilities, and transmission and distribution infrastructure. They also require considerable funds to upgrade the existing systems in order to meet emission-control standards. Utilities have been benefiting from the rock-bottom interest rate environment. However, the Federal Reserve raised interest rates for two consecutive quarters (Dec 2016 and Mar 2017), which will definitely hurt the utilities.
As per the U.S. Energy Information Administration (EIA), total U.S. electricity generation from utility-scale plants is expected to decline 0.7% per day in 2017 from 11,140 gigawatt hours in 2016 on account of lower demand. The drop will more than offset the expected rise in electricity prices in 2017 and will mar the prospects of utilities as well.
Moderate winter weather in most parts of the U.S. is not going to help the utilities either and is likely to have an adverse effect on demand and earnings of these companies.
Despite the above negatives, customer growth due to proper cost control, new electric rates and improving economic conditions is helping the utility sector to come out with positive earnings this season. Earnings are expected to improve 2.5% on 5.8% higher revenues this season.
At present, three out of the 16 sectors in the Zacks coverage universe are expected to witness an earnings decline this season. Read more details in our weekly Earnings Outlook report.
Let’s take a look at some utilities that are scheduled to report quarterly numbers on May 5.
The company’s Earnings ESP is -2.78%. This is because the Most Accurate estimate is 35 cents while the Zacks Consensus Estimate stands higher at 36 cents. According to our proven model, only those stocks which have both a positive ESP and a Zacks Rank #1, 2 or 3 (Hold) have increased chances of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NewJersey Resources Corporation (NJR - Free Report) reported a negative earnings surprise of 22.03% in the previous quarter. The company currently carries a Zacks Rank #3.
NewJersey Resources Corporation Price and EPS Surprise
NewJersey Resources’ Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.00. The company is unlikely to beat earnings as it does not have the right combination of the two key ingredients.
Hawaiian Electric Industries, Inc. (HE - Free Report) reported a negative earnings surprise of 2.38% in the prior quarter. The company currently carries a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Hawaiian Electric Industries, Inc. Price and EPS Surprise
Hawaiian Electric’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 29 cents. The company is unlikely to beat earnings as it does not have the right combination of the two key ingredients.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Utility Stock Q1 Earnings Reports Due on May 5: CNP, NJR, HE
We are approaching the close of first-quarter 2017 reporting cycle, with nearly 71.6% or 358 S&P 500 members having released their earnings reports as of May 3, 2017. Reported earnings were up 12.9% year over year on 7.9% higher revenues. Among them, 74.3% beat EPS estimates while 65.9% beat revenue estimates.
For the remaining 142 index members (combined with the already reported 358 index members), earnings are estimated to improve 11.9% on 6.2% higher revenues this season. The trend of earnings releases indicates that this could be the third straight quarter to record earnings growth after five back-to-back quarters of decline.
Let us now focus on the utility sector, which is characterized by its defensive nature and domestic orientation.
The utility sector is also known for its capital-intensive nature. This is because these companies need huge capital to set up generation facilities, and transmission and distribution infrastructure. They also require considerable funds to upgrade the existing systems in order to meet emission-control standards. Utilities have been benefiting from the rock-bottom interest rate environment. However, the Federal Reserve raised interest rates for two consecutive quarters (Dec 2016 and Mar 2017), which will definitely hurt the utilities.
As per the U.S. Energy Information Administration (EIA), total U.S. electricity generation from utility-scale plants is expected to decline 0.7% per day in 2017 from 11,140 gigawatt hours in 2016 on account of lower demand. The drop will more than offset the expected rise in electricity prices in 2017 and will mar the prospects of utilities as well.
Moderate winter weather in most parts of the U.S. is not going to help the utilities either and is likely to have an adverse effect on demand and earnings of these companies.
Despite the above negatives, customer growth due to proper cost control, new electric rates and improving economic conditions is helping the utility sector to come out with positive earnings this season. Earnings are expected to improve 2.5% on 5.8% higher revenues this season.
At present, three out of the 16 sectors in the Zacks coverage universe are expected to witness an earnings decline this season. Read more details in our weekly Earnings Outlook report.
Let’s take a look at some utilities that are scheduled to report quarterly numbers on May 5.
CenterPoint Energy, Inc. (CNP - Free Report) reported a negative earnings surprise of 10.34% in the previous quarter. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CenterPoint Energy, Inc. Price and EPS Surprise
CenterPoint Energy, Inc. Price and EPS Surprise | CenterPoint Energy, Inc. Quote
The company’s Earnings ESP is -2.78%. This is because the Most Accurate estimate is 35 cents while the Zacks Consensus Estimate stands higher at 36 cents. According to our proven model, only those stocks which have both a positive ESP and a Zacks Rank #1, 2 or 3 (Hold) have increased chances of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CenterPoint Energy is unlikely to beat earnings because it does not have the right combination of the two key ingredients (read more: CenterPoint Energy Q1 Earnings: What's in the Cards?)
NewJersey Resources Corporation (NJR - Free Report) reported a negative earnings surprise of 22.03% in the previous quarter. The company currently carries a Zacks Rank #3.
NewJersey Resources Corporation Price and EPS Surprise
NewJersey Resources Corporation Price and EPS Surprise | NewJersey Resources Corporation Quote
NewJersey Resources’ Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.00. The company is unlikely to beat earnings as it does not have the right combination of the two key ingredients.
Hawaiian Electric Industries, Inc. (HE - Free Report) reported a negative earnings surprise of 2.38% in the prior quarter. The company currently carries a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Hawaiian Electric Industries, Inc. Price and EPS Surprise
Hawaiian Electric Industries, Inc. Price and EPS Surprise | Hawaiian Electric Industries, Inc. Quote
Hawaiian Electric’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 29 cents. The company is unlikely to beat earnings as it does not have the right combination of the two key ingredients.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>