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What's in Store for Edison International (EIX) in Q2 Earnings?

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Edison International (EIX - Free Report) is set to report second-quarter 2021 results on Jul 29, after market close. In the last reported quarter, the company delivered an earnings surprise of 3.95%.

In the trailing four quarters, the company came up with an earnings surprise of 1.69%, 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 April-June quarter of 2021, major parts of the company’s service territories experienced above-average temperatures, accompanied with extreme drought conditions. Such weather pattern must have spurred electricity demand among the utility’s customers in the region. This, in turn, is expected to have boosted Edison International’s second-quarter top line.

Edison International Price and EPS Surprise

Edison International Price and EPS Surprise

Edison International price-eps-surprise | Edison International Quote

Also, favorable rate base decisions in the recent quarters are expected to have boosted the company’s quarterly revenues.

The  Zacks Consensus Estimate for second-quarter revenues is pegged at $3.09 billion, indicating 3.5% growth from the year-ago quarter’s reported figure.

The scorching heat that Edison International’s service territories witnessed in the second quarter resulted in some wildfire events. This in turn must have pushed up the company’s wildfire mitigation expenses, thereby hurting its earnings performance in the soon-to-be-reported quarter. Also, incremental residential uncollectible expenses associated with the economic effects of the COVID-19 pandemic might have hurt its bottom line.

Nevertheless, favorable contributions FERC-related and CPUC-related revenues are expected to have benefited Edison International’s Q2 earnings performance, thereby partially offsetting the aforementioned adverse impacts.

For the second quarter, the Zacks Consensus Estimate for earnings per share is pegged at 99 cents, which indicates 1% dip 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 -1.66%. 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.

Stocks to Consider

Here are a few players from the Utilities sector that have the right combination of elements to post an earnings beat this season.

CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +0.68% and holds a Zacks Rank #3.

Duke Energy (DUK - Free Report) has an Earnings ESP of +0.15% and carries a Zacks Rank #3.

Consolidated Edison (ED - Free Report) has an Earnings ESP of +1.60% and carries a Zacks Rank #3.