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Utility Stocks Q1 Earnings Due on May 3: PPL, ED & More
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The Q1 earnings season is past the halfway mark, with 267 S&P 500 members having already reported their quarterly results as of Apr 27. Going by the positive trends, the first quarter is poised to record the strongest earnings and revenue growth in seven years. Earnings for the S&P 500 members that have already reported are up 25.1% from the same period last year on 10.0% higher revenues. Of these, 76.8% beat EPS estimates and 73.8% surpassed revenue expectations.
Per our latest Earnings Preview report, overall earnings in the first quarter for all the S&P 500 members are expected to be up 22.6% on 8.4% growth in revenues.
Amid the positive earnings outlook for the first quarter, let’s concentrate on the domestic-focused matured Zacks Utility sector. This sector, along with 14 of the 16 Zacks sectors, is likely to come up with improved year-over-year earnings. Currently, only the Auto, Tires and Trucks sector is likely to register an earnings decline.
Utility sector’s earnings are expected to increase 13.9% year over year on 1.4% growth in revenues, thanks to stable performance by most of the utilities. The need for heating, stemming from cold weather conditions, and increased demand for electricity aided the utilities. Additionally, tax reforms also helped the utilities in lowering their tax burden substantially.
Utilities, apart from investing in generation plants that produce electricity with low and negligible amount of emissions, are focused on improving and upgrading transmission and distribution networks. Utilities are also investing in power storage facilities and encouraging investors for efficient usage of electricity.
Rate-sensitive capital-intensive utility stocks have also accommodated the rate hikes. Notably, the Fed has now raised rates six times (latest in March 2018) since the first hike in December 2015.
Let’s take a look at some Utility stocks scheduled to report first-quarter 2018 earnings on May 3 and see how things are shaping up for the upcoming results.
PPL Corporation (PPL - Free Report) delivered a positive earnings surprise of 14.58% in the last reported quarter. PPL Corporation expects to benefit from higher transmission earnings from its Pennsylvania Regulated Segment. However, higher financing costs are expected to offset the gains. (Read more: What's in Store for PPL Corp This Earnings Season?)
PPL has an Earnings ESP of +0.63% and a Zacks Rank #3 (Hold), which is a favorable combination indicating a positive earnings surprise this season. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 to beat estimates. You can see the complete list of today’s Zacks #1 Rank stocks here..
Consolidated Edison, Inc.(ED - Free Report) delivered a positive earnings surprise of 2.56% in the last reported quarter. Weather pattern tends to influence quarterly results of utility providers. During the first quarter, Consolidated Edison’s service territories witnessed fluctuating weather, which might impact its revenues.
Consolidated Edison has an Earnings ESP of +0.30% and a Zacks Rank #3, indicates a likely positive surprise.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NRG Energy (NRG - Free Report) delivered a positive earnings surprise of 737.50% in the last reported quarter. The company will gain through cost savings and margin expansion under its Transformation Plan announced in July 2017. (Read more: NRG Energy to Report Q1 Earnings: What's in Store?)
NRG Energy has an Earnings ESP of 0.00% and a Zacks Rank #1, which makes earnings surprise prediction difficult.
PG&E Corporation (PCG - Free Report) delivered a negative earnings surprise of 8.70% in the last reported quarter. Unfavorable weather in its services territories is expected to adversely impact demand in the first quarter. (Read more: PG&E to Report Q1 Earnings: What's in the Cards?)
PG&E Corporation has an Earnings ESP of -1.86% and a Zacks Rank #3, making earnings surprise prediction difficult this season.
Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Utility Stocks Q1 Earnings Due on May 3: PPL, ED & More
The Q1 earnings season is past the halfway mark, with 267 S&P 500 members having already reported their quarterly results as of Apr 27. Going by the positive trends, the first quarter is poised to record the strongest earnings and revenue growth in seven years. Earnings for the S&P 500 members that have already reported are up 25.1% from the same period last year on 10.0% higher revenues. Of these, 76.8% beat EPS estimates and 73.8% surpassed revenue expectations.
Per our latest Earnings Preview report, overall earnings in the first quarter for all the S&P 500 members are expected to be up 22.6% on 8.4% growth in revenues.
Amid the positive earnings outlook for the first quarter, let’s concentrate on the domestic-focused matured Zacks Utility sector. This sector, along with 14 of the 16 Zacks sectors, is likely to come up with improved year-over-year earnings. Currently, only the Auto, Tires and Trucks sector is likely to register an earnings decline.
Utility sector’s earnings are expected to increase 13.9% year over year on 1.4% growth in revenues, thanks to stable performance by most of the utilities. The need for heating, stemming from cold weather conditions, and increased demand for electricity aided the utilities. Additionally, tax reforms also helped the utilities in lowering their tax burden substantially.
Utilities, apart from investing in generation plants that produce electricity with low and negligible amount of emissions, are focused on improving and upgrading transmission and distribution networks. Utilities are also investing in power storage facilities and encouraging investors for efficient usage of electricity.
Rate-sensitive capital-intensive utility stocks have also accommodated the rate hikes. Notably, the Fed has now raised rates six times (latest in March 2018) since the first hike in December 2015.
Let’s take a look at some Utility stocks scheduled to report first-quarter 2018 earnings on May 3 and see how things are shaping up for the upcoming results.
PPL Corporation (PPL - Free Report) delivered a positive earnings surprise of 14.58% in the last reported quarter. PPL Corporation expects to benefit from higher transmission earnings from its Pennsylvania Regulated Segment. However, higher financing costs are expected to offset the gains. (Read more: What's in Store for PPL Corp This Earnings Season?)
PPL Corporation Price and EPS Surprise
PPL Corporation Price and EPS Surprise | PPL Corporation Quote
PPL has an Earnings ESP of +0.63% and a Zacks Rank #3 (Hold), which is a favorable combination indicating a positive earnings surprise this season. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 to beat estimates. You can see the complete list of today’s Zacks #1 Rank stocks here..
Consolidated Edison, Inc.(ED - Free Report) delivered a positive earnings surprise of 2.56% in the last reported quarter. Weather pattern tends to influence quarterly results of utility providers. During the first quarter, Consolidated Edison’s service territories witnessed fluctuating weather, which might impact its revenues.
Consolidated Edison Inc Price and EPS Surprise
Consolidated Edison Inc Price and EPS Surprise | Consolidated Edison Inc Quote
Consolidated Edison has an Earnings ESP of +0.30% and a Zacks Rank #3, indicates a likely positive surprise.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NRG Energy (NRG - Free Report) delivered a positive earnings surprise of 737.50% in the last reported quarter. The company will gain through cost savings and margin expansion under its Transformation Plan announced in July 2017. (Read more: NRG Energy to Report Q1 Earnings: What's in Store?)
NRG Energy, Inc. Price and EPS Surprise
NRG Energy, Inc. Price and EPS Surprise | NRG Energy, Inc. Quote
NRG Energy has an Earnings ESP of 0.00% and a Zacks Rank #1, which makes earnings surprise prediction difficult.
PG&E Corporation (PCG - Free Report) delivered a negative earnings surprise of 8.70% in the last reported quarter. Unfavorable weather in its services territories is expected to adversely impact demand in the first quarter. (Read more: PG&E to Report Q1 Earnings: What's in the Cards?)
Pacific Gas & Electric Co. Price and EPS Surprise
Pacific Gas & Electric Co. Price and EPS Surprise | Pacific Gas & Electric Co. Quote
PG&E Corporation has an Earnings ESP of -1.86% and a Zacks Rank #3, making earnings surprise prediction difficult this season.
Note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>