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What's in Store for Edison International (EIX) Q4 Earnings?

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Edison International (EIX - Free Report) is set to report fourth-quarter 2020 results on Feb 25, after market close. In the last reported quarter, the company delivered an earnings surprise of 15.97%.

In the trailing four quarters, the company came up with a negative earnings surprise of 4.23%, 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 Edison International’s fourth-quarter top line.

Also, the escalation mechanism from the 2018 general rate case (GRC) decision is expected to have boosted the company’s quarterly revenues.

In line with this, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $3.08 billion, indicating 3.6% growth from the year-ago quarter’s reported figure.

During the third-quarter earnings call, the California Public Utilities Commission (CPUC) issued certain decisions in favor of several Southern California Edison’s (SCE) key filings. These included the 2020 Safety Certification, the Charge Ready 2 program and the WEMA application authorizing $505 million of wildfire insurance cost recovery. Hence, improvements in rate base earnings for SCE are likely to have boosted the company’s quarterly bottom line.

In recent times, the utility has also been managing costs well in spite of the adverse impacts of the COVID-19 pandemic. These factors are expected to have benefited Edison International’s earnings performance in the soon-to-be-reported quarter.

For the fourth quarter, the Zacks Consensus Estimate for earnings per share is pegged at $1.23, which indicates 24.2% growth from the figure reported in the year-ago quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Edison International 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 this is not the case here.

Earnings ESP: Edison International has an Earnings ESP of -2.03%. 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.

Edison International Price and EPS Surprise

Stocks to Consider

Here are a few 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.

Sempra Energy (SRE - Free Report) has an Earnings ESP of +6.45% and a Zacks Rank #3.

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.

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