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CMS Energy (CMS) to Report Q4 Earnings: What's in the Cards?

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CMS Energy Corporation (CMS - Free Report) is set to report fourth-quarter 2020 results on Feb 4, before market open. In the last reported quarter, the company delivered an earnings surprise of 13.24%.

In the trailing four quarters, CMS Energy came up with an earnings surprise of 8.09%, on average.

Factors to Consider

During most part of the October-December 2020 quarter, the company’s service territories experienced mixed temperature. While in October, above average snowfall is expected to have boosted electricity sales of its service territories, warmer-than-normal temperature was observed in the months of November and December. So, the overall impact of weather on fourth-quarter sales may have been neutral.

CMS Energy Corporation Price and EPS Surprise

CMS Energy Corporation Price and EPS Surprise

CMS Energy Corporation price-eps-surprise | CMS Energy Corporation Quote

Notably, amid the pandemic, the company’s residential sales have remained elevated as most people have been working from home. A similar trend is expected to have boosted its fourth-quarter sales. On the other hand, with phased reopening of Michigan’s economy, commercial and industrial segments’ sales have been recovering in recent times. So, overall, we remain optimistic about the company’s top-line growth in the soon-to-be-reported quarter.  

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $1.83 billion, indicating 1.9% improvement from the year-ago quarter’s reported figure.

In December, a handful of snowstorms affected Midwestern U.S., within which CMS Energy’s service territory, Michigan falls. This might have caused some outage for the company’s customers causing disrupted electricity flow as well as infrastructural damage. This might have pushed up the company’s storm restoration expenses, thereby impacting its bottom line.

Moreover, in the wake of the pandemic, CMS Energy has been incurring additional expenses like quarantine-related expenses and potential sequestration related costs in recent times, which might have also dragged down its Q4 earnings.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 55 cents, which indicates a 19.1% decline 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 +1.82%. 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.

Other Stocks to Consider

Here are a handful of stocks from the Utilities sector that are yet to release their Q4 results and possess the right combination to deliver an earnings beat.

CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +11.11% and holds a Zacks Rank #2.

Pacific Gas & Electric Company (PCG - Free Report) has an Earnings ESP of +10.53% and carries a Zacks Rank #3.

AES Corp. (AES - Free Report) has an Earnings ESP of +0.73% and carries a Zacks Rank #3.

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