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What's in the Cards for Xcel Energy (XEL) in Q2 Earnings?

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Xcel Energy Inc. (XEL - Free Report) is scheduled to release second-quarter earnings on Jul 30, before market open. The company witnessed a negative earnings surprise of 5.08% in the last reported quarter. Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

Xcel Energy generates 37% of its electric revenues from residential customers while Commercial and Industrial (C&I) accounts for 63% of the company’s top line. Even though the residential load is expected to have increased owing to stay-at-home directives, it might not have fully offset the demand loss from C&I group due to the lockdown, which turn, is likely to have adversely impacted second-quarter earnings. However, a hotter summer in June might have raised the company’s residential load level.

The industry player’s efforts to manage operational and maintenance expenses will help it mitigate the revenue decline to some extent. Nearly, 62% of the company’s natural gas revenues is generated from residential group and is likely to have boosted its second quarter earnings.

Q2 Projections

The Zacks Consensus Estimate for second-quarter 2020 sales is pegged at $2.81 billion, indicating 9.16% growth from the year-ago quarter’s reported figure. The consensus estimate for second-quarter earnings per share stands at 46 cents, which is on par with the year-earlier quarter’s reported figure.

What Our Quantitative Model Predicts

Our proven model doesn’t predict an earnings beat for Xcel 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. That is not the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.
 

Xcel Energy Inc. Price and EPS Surprise

Xcel Energy Inc. Price and EPS Surprise

Xcel Energy Inc. price-eps-surprise | Xcel Energy Inc. Quote

Earnings ESP: Xcel Energy has an Earnings ESP of -5.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Xcel Energy carries a Zacks Rank #3.

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to beat on earnings this reporting cycle.

Duke Energy Corporation (DUK - Free Report) is set to release second-quarter 2020 numbers on Aug 10. It has an Earnings ESP of +0.39% and a Zacks Rank of 3, currently.

CenterPoint Energy, Inc. (CNP - Free Report) is scheduled to release second-quarter 2020 results on Aug 6. It has an Earnings ESP of +24.14% and is a Zacks #3 Ranked presently.

American Electric Power Company, Inc. (AEP - Free Report) is scheduled to release second-quarter 2020 results on Aug 6. It has an Earnings ESP of +4.93% and is a Zacks #3 Ranked player at present.

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