Back to top

Image: Bigstock

What Awaits Public Service Enterprise (PEG) in Q2 Earnings?

Read MoreHide Full Article

Public Service Enterprise Group Inc. (PEG - Free Report) is scheduled to release second-quarter 2020 results on Jul 31, before the opening bell.

The company’s earnings missed the Zacks Consensus Estimate in one of the trailing four quarters, beat the same twice and came in line with estimates once, the average negative surprise being 0.02%.

Let’s see how things have shaped up prior to the announcement.

Factors to Consider

During the April-June 2020 quarter, Public Service Enterprise’s service territory areas experienced a wide range of temperature. While colder-than-normal temperature prevailed in some parts, above-average precipitation was witnessed in other parts, especially the Mid-Atlantic region. Therefore, overall weather is unlikely to have been a growth catalyst for this utility provider in the second quarter.

Moreover, reduced rate of economic activities in the wake of the ongoing coronavirus pandemic must have reduced commercial and industrial electric sales for the company. This in turn might have weighed on its quarterly revenues. Nevertheless, revenues from ongoing capital investment programs in transmission and distribution may have contributed to the top line of the company.

The Zacks Consensus Estimate for Public Service Enterprise’s second-quarter revenues is pegged at $2.30 billion, indicating a dip of 0.8% from the year-ago quarter’s reported figure.

In terms of margin, transmission and residential electric and gas customers comprise three quarters of the utility’s total margins.  Impressively, transmission is not volume sensitive and residential customer margin is expected to have been higher during the second quarter with a higher number of people working from home. This expected growth in margin may have boosted the company’s second-quarter earnings amid poor revenue expectations.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 59 cents per share, which suggests 1.7% increase from the year-ago quarter reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Public Service Enterprise 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.  But that is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Public Service Enterprise carries a Zacks Rank #3.

Stocks to Consider

Here are a few players from the Utilities sector that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +7.87% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pinnacle West Capital (PNW - Free Report) has an Earnings ESP of +5.07% and a Zacks Rank #3.

Southwest Gas Corporation (SWX - Free Report) has an Earnings ESP of +41.77% and a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>