American Electric Power Company, Inc. ( AEP Quick Quote AEP - Free Report) is set to release first-quarter 2021 results on Apr 22, before market open. In the last reported quarter, the company delivered an earnings surprise of 10.1%.
In the trailing four quarters, American Electric delivered an average earnings surprise of 1.6%.
Let's take a closer look at the factors that are likely to influence the company’s upcoming quarterly results.
Factors at Play
During the January-March 2021 quarter, the majority of the company's service territories witnessed colder-than-normal temperature. This must have boosted electricity demand for heating purpose among American Electric’s customers and, in turn, promoted top-line growth in the soon-to-be-reported quarter.
Also, the impact of favorable rate changes across multiple jurisdictions and higher transmission revenues are expected to have contributed favorably to its quarterly revenues.
The Zacks Consensus Estimate for American Electric’s first-quarter revenues is pegged at $4.13 billion, indicating a rise of 10.3% from the year-ago reported figure.
A handful of states within the company’s service territories experienced strong storm activities, with some of them witnessing hails, while some tornedos.
Such weather conditions damaged electric poles and infrastructure, apart from causing widespread outages. This might have increased American Electric’s quarterly expenses, thereby hurting the bottom line.
Meanwhile, the company has been exerting efforts to achieve notable cost-reduction targets, an initiative that is expected to have offset the negative impact of the aforementioned storm activities on overall expense to some extent.
Further, since fourth-quarter 2020, it has been witnessing improvement in commercial and industrial loads, as the economy is gradually recovering. Therefore, solid margin from residential sales, with the shift of many people to the work-from-home culture, and commercial and industrial sales must have boosted operating margin in the first quarter. This in turn must have bolstered its overall earnings performance.
The Zacks Consensus Estimate for the company’s first-quarter earnings is pegged at $1.24 per share, suggesting a 21.6% improvement from the year-ago reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for American Electric this time around. The combination of a positive
Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. Earnings ESP: American Electric has an Earnings ESP of 0.00%. 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 stocks here Stocks to Consider
Here are a handful of stocks from the
Utilities sector that are yet to release Q1 results and possess the right combination to deliver an earnings beat. CenterPoint Energy ( CNP Quick Quote CNP - Free Report) has an Earnings ESP of +12.99% and holds a Zacks Rank #2. Ameren Corp. ( AEE Quick Quote AEE - Free Report) has an Earnings ESP of +1.16% and carries a Zacks Rank #3. CMS Energy ( CMS Quick Quote CMS - Free Report) has an Earnings ESP of +0.25% and carries a Zacks Rank #2. Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale. Download FREE: How to Profit from Trillions on Spending for Infrastructure >>