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What's in the Cards for Sempra Energy's (SRE) Q4 Earnings?

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Sempra Energy (SRE - Free Report) is set to report fourth-quarter 2020 results on Feb 25, before market open. In the last reported quarter, the company delivered a negative earnings surprise of 10.88%.

In the trailing four quarters, Sempra Energy came up with an earnings surprise of 9.90%, on average.

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

Factors to Consider

During most part of the fourth quarter, major parts of the company’s service territories experienced above-average temperatures, significantly highlighted by warm weather conditions. Interestingly, the company’s service territories ranked warmest on record for October and November. Such warm conditions might have spurred electricity demand by the utility’s customers in the region. This, in turn, is expected to have aided Sempra Energy’s fourth-quarter top line.

Nevertheless, the current market challenges, courtesy of the COVID-19 pandemic, have been weighing on the country’s overall energy demand, which in turn is likely to have adversely impacted Sempra Energy’s quarterly revenue performance.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.95 billion, indicating a mere 0.1% rise from the year-ago quarter’s reported figure.

Sempra Energy is expected to have incurred costs related to the wildfire, which rekindled during the month of October in Southern California, disrupting the smooth flow of electricity to its customers. Such costs might have dragged down its quarterly bottom line in the soon-to-be-reported quarter. On a bright note, Cameron LNG Phase 1 reached full commercial operations in August, with all its three trains now generating favorable earnings. This is likely to have favorably contributed to Sempra Energy’s bottom-line performance in the soon-to-be-reported quarter.

For the fourth quarter, the Zacks Consensus Estimate for earnings per share is pegged at $1.55, in line with the earnings figure reported in the year-ago quarter.

Earnings Whispers

Our proven model predicts an earnings beat for Sempra 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: Sempra Energy has an Earnings ESP of +6.45%. 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.

Sempra Energy Price and EPS Surprise

Sempra Energy Price and EPS Surprise

Sempra Energy price-eps-surprise | Sempra Energy Quote

Other Stocks to Consider

Here are a few other 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 a Zacks Rank #3.

Exelon Corporation (EXC - Free Report) has an Earnings ESP of +2.34% and a Zacks Rank #3.

A Recent Sector Release

Consolidated Edison Inc. (ED - Free Report) reported fourth-quarter 2020 adjusted earnings of 75 cents per share, which surpassed the Zacks Consensus Estimate of 72 cents by 4.2%.

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