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What Awaits Public Service Enterprise (PEG) in Q4 Earnings?

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Public Service Enterprise Group Inc. (PEG - Free Report) is scheduled to release fourth-quarter 2020 results on Feb 26, before the opening bell.

The company delivered an earnings surprise of 1.05% in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and came in line with the same once, the average negative surprise being 9.55%.

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

Factors to Consider

During the October-December 2020 quarter, majority of Public Service Enterprise’s service territory areas experienced warmer-than-normal temperature, which must have boosted electricity demand for cooling purposes. This is expected to have bolstered the company’s revenue generation in the soon-to-be-reported quarter.

 

The yet-to-be-reported results are expected to reflect strong residential sales number, while lower demands in the commercial and industrial sections of the economy might have marred the company’s top line performance to some extent.

The Zacks Consensus Estimate for Public Service Enterprise’s fourth-quarter revenues is pegged at $2.70 billion, indicating an improvement of 8.8% from the year-ago quarter’s reported figure.

A series of tropical storms including Hurricane Eta, accompanied with heavy rain fall, affected the company’s service territories during the fourth quarter, resulting in widespread infrastructural damage and power outages. This must have pushed up storm restoration costs for the company, which in turn might have weighed on its earnings.

On a brighter note, flow through taxes and other items, which lowered the company’s net income in the third quarter, must have reversed in the soon-to-be-reported quarter as predicted by the company, thereby boosting its bottom line. Moreover, margins might have improved driven by the scheduled increase in property prices.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 64 cents per share, which suggests no change 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 some stocks from the Utilities sector that are yet to release Q4 results and possess the right combination to deliver an earnings beat.

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

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

A Recent Utility Release

ONEOK Inc (OKE - Free Report) posted fourth-quarter 2020 operating earnings of 69 cents per share, missing the Zacks Consensus Estimate of 74 cents by 6.8%. Also, the bottom line declined 10.4% on a year-over-year basis.

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