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What's in Store for Consolidated Edison (ED) in Q3 Earnings?

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Consolidated Edison Inc. (ED - Free Report) is scheduled to release third-quarter 2020 results on Nov 5, after market close. In the last reported quarter, the company delivered an earnings surprise of 11.11%.

In the trailing four quarters, Consolidated Edison came up with an average earnings surprise of 2.64%.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc price-eps-surprise | Consolidated Edison Inc Quote

 

Factors to Consider

During the third quarter, majority of Consolidated Edison’s service territories witnessed a warmer-than-normal temperature. This might have boosted electricity demand from the company’s customers for cooling purposes, which in turn must have contributed to its quarterly revenue growth.

However, the utility’s service territories suffered a series of tropical storms including Hurricane Isaias during the third quarter, which caused widespread damage to its infrastructure and power outages for its customers. This might have had an adverse impact on Consolidated Edison’s third-quarter performance.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $3.39 billion, which indicates a mere 0.7% rise from the year-ago quarter’s reported figure.

As a result of the aforementioned storms, Consolidated Edison is expected to have incurred substantial expenses for restoration work. Moreover, the company has been incurring incremental expenses related to information technology for facilitating teleworking, benefits for employees and dependents affected by COVID-19 and other additional costs incurred to support the safety and well-being of workers during the crisis.

Cumulatively, these costs might have had an adverse impact on the company’s performance during the soon-to-be-reported quarter. The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.53 per share, indicating a 0.7% dip from the year-ago quarter’s reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Consolidated Edison 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 as elaborated below.

Earnings ESP: Consolidated Edison has an Earnings ESP of -1.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Recent Utility Releases

Entergy (ETR - Free Report) reported third-quarter 2020 adjusted earnings of $2.44 per share, which surpassed the Zacks Consensus Estimate of $2.42 by 0.8%.

American Electric Power (AEP - Free Report) reported third-quarter 2020 adjusted earnings per share of $1.47, which beat the Zacks Consensus Estimate of $1.46 by 0.7%.

NextEra Energy (NEE - Free Report) reported third-quarter 2020 adjusted earnings of $2.66 per share, which beat the Zacks Consensus Estimate of $2.65 by 0.4%.

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