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CMS Energy (CMS) to Report Q2 Earnings: What's in the Cards?

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CMS Energy Corporation (CMS - Free Report) is set to report second-quarter 2020 financial results on Jul 23, before market open. In the last reported quarter, the company delivered an earnings surprise of 11.69%.

In the trailing four quarters, CMS Energy came up with an earnings surprise of 0.75%, on average.

Let's take a closer look at the factors influencing the company’s upcoming quarterly results.

Factors to Consider  

During most part of the second quarter, the company’s service territories experienced below-normal temperatures along with occasional snowfalls in the region. Alongside cold temperatures, its service territories witnessed significant wet weather conditions throughout the quarter. These are likely to have resulted in higher electricity demand for heating purposes, which in turn are likely to have boosted CMS Energy’s top line in the second quarter.

In line with this, the Zacks Consensus Estimate for second-quarter revenues is pegged at $1.53 billion, indicating a 5.6% improvement from the year-ago quarter’s reported figure.

The company’s cost-reduction initiatives have largely been driven by CE Way as well as lower storm restoration expenses. In recent times, CMS Energy has also been witnessing structural cost reductions in the form of retiring coal plants and expiring power purchase agreements (PPA). These, in turn, are expected to have bolstered CMS Energy’s quarterly earnings.

Although the COVID-19 pandemic affected the company’s commercial industrial load, it is expected to not have impacted CMS Energy’s second-quarter earnings, as the residential customer segment offers the highest margins.  

For the second quarter, the Zacks Consensus Estimate for earnings is pegged at 40 cents, which indicates a 21.2% improvement from the figure reported in the year-ago quarter.

Earnings Whispers

Our proven model predicts an earnings beat for CMS Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: CMS Energy has an Earnings ESP of +11.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CMS Energy Corporation Price and EPS Surprise

Other Stocks to Consider

Here are a few players from the Utilities sector that have the right combination of elements to post an earnings beat this season.

NextEra Energy (NEE - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2. The company will announce second-quarter 2020 earnings on Jul 24.

The Southern Company (SO - Free Report) has an Earnings ESP of +1.10% and a Zacks Rank #3. The company will announce second-quarter 2020 earnings on Jul 30.

CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +49.40% and a Zacks Rank #3. The company will announce second-quarter 2020 earnings on Aug 6.

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