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Utility Stock Q3 Earnings to Watch on Nov 4: DUK, SO & More

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Third-quarter earnings of S&P 500 members from the Zacks Utilities sector have been satisfactory so far. Notably, all the S&P 500 members from this sector that have reported so far have come up with better-than-expected Q3 earnings.

The domestic-focused matured Utility sector is one among the 12 of the total 16 Zacks sectors projected to report year-over-year earnings growth.

Factors Likely to Have Influenced Q3 Performance

During the July-September 2021 quarter, a decent recovery was observed in economic activities across the United States, overcoming the challenges posed by the COVID-19 pandemic. Consequently, we witnessed a strong surge in economic activities within the commercial and industrial space (C&I), which in turn must have boosted electricity demand from these sections in the third quarter.

As more workers returned to offices, demand from the residential space might have been weak compared to the past couple of reported quarters. The overall impact of electricity demand and consumption of the Utility sector is expected to have been moderate in the ongoing reporting cycle.

Utilities’ investments to strengthen transmission and distribution lines, expand infrastructure and ensure proper maintenance of the existing infrastructure that aids in providing 24x7 services to customers boost their quarterly operational performance. The continuation of near-zero interest rates has been assisting capital-intensive utility companies in getting funds at low costs to carry on with infrastructure strengthening work.

Q3 Expectations

Total Q3 earnings of Utility stocks are expected to remain flat year over year on 6.3% higher revenues. For more details on quarterly releases, you can go through our latest Earnings Preview.

Utilities' Earnings in Focus

Let's take a look at some Utility stocks that are scheduled to report earnings on Nov 4.

Duke Energy Corporation (DUK - Free Report) earnings surpassed the Zacks Consensus Estimate in the last four quarters, with the average earnings surprise being 2.44%. The company’s service territories experienced mixed weather patterns, which is likely to have had a moderate impact on the utility’s third-quarter performance.

Escalated operations and maintenance expenses might have weighed on the to-be-reported quarter’s earnings performance (read more: Duke Energy to Post Q3 Earnings: What's in Store?).

Our proven model does not conclusively predict an earnings beat for Duke 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 odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3.

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation price-eps-surprise | Duke Energy Corporation Quote

The Southern Company (SO - Free Report) came up with a four-quarter average earnings surprise of 7.33%. Leveraging the demographics of its operating territories, the company has been successfully expanding its regulated business customer base. This trend most likely continued in the third quarter because of healthy population growth across its electric and gas franchises.

The upward operating cost trajectory is likely to have continued in the third quarter due to escalation in the Vogtle nuclear project-related outlays, primarily stemming from quality/safety issues (read more: What Lies Ahead for Southern Company in Q3 Earnings?).

The company has an Earnings ESP of -0.87% and carries a Zacks Rank #4 (Sell).

Southern Company The Price and EPS Surprise

Southern Company The Price and EPS Surprise

Southern Company The price-eps-surprise | Southern Company The Quote

You can see the complete list of today’s Zacks #1 Rank stocks here.

Consolidated Edison (ED - Free Report) came up with a four-quarter average negative earnings surprise of 1.80%. The majority of its service territories witnessed warmer-than-normal temperatures, accompanied by heavy rainfall in some parts, which are likely to have contributed favorably to the company’s revenue growth in the third quarter.

However, adverse weather patterns like flash floods and even a hurricane, hampered some parts of its service areas during the third quarter. These might have damaged some of this utility’s properties, thereby hampering smooth electricity flow and pushing up its quarterly expenses (read more: What's in Store for Consolidated Edison in Q3 Earnings?).

The company has an Earnings ESP of -1.21% and carries a Zacks Rank #3.

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc price-eps-surprise | Consolidated Edison Inc Quote

PPL Corporation (PPL - Free Report) came up with a four-quarter average negative earnings surprise of 21.54%. Solid demand from the residential players and improving demand from the Commercial and Industrial group owing to economic recovery in its service areas are likely to aid the utility’s upcoming results.

Reduction of long-term debt is expected to have lowered its capital-financing costs and is likely to have boosted margins in the third quarter (read more: PPL to Report Q3 Earnings: What's in the Cards?).

The company has an Earnings ESP of +4.29% and carries a Zacks Rank #5.

PPL Corporation Price and EPS Surprise

PPL Corporation Price and EPS Surprise

PPL Corporation price-eps-surprise | PPL Corporation Quote

AES Corporation (AES - Free Report) came up with a four-quarter average earnings surprise of 1.14%. During the third quarter, the company purchased its remaining 49.9% stake in AES Colon, thereby increasing its ownership to 100% for this liquefied natural gas (LNG) plant. Notably, 100% of the output from AES Colon facility is contracted through 2028. This is likely to have benefited the to-be-reported quarter’s performance.

Also, the company’s solid cost-saving initiative and reduced interest expenses may have positively impacted the third-quarter earnings performance (read more: AES Corporation to Post Q3 Earnings: What's in Store?).

The company has an Earnings ESP of +6.90% and carries a Zacks Rank #3.

The AES Corporation Price and EPS Surprise

The AES Corporation Price and EPS Surprise

The AES Corporation price-eps-surprise | The AES Corporation Quote

CenterPoint Energy (CNP - Free Report) came up with a four-quarter average earnings surprise of 23.59%. Its service territories experienced warmer-than-normal temperatures, accompanied with heavy rainfall. However, Hurricane Ida in August and Hurricane Nicholas in September in Louisiana may have disrupted CenterPoint’s services in the area, resulting in outages for its customers. This is likely to have impacted its third-quarter performance.

These hurricanes might have damaged some of the utility’s infrastructure, thus pushing up its quarterly costs for restoration work. This along with an expected cost related to the recent governance changes made by the company’s board of directors may have weighed on the to-be-reported quarter’s performance (read more: What's in Store for CenterPoint Energy's Q3 Earnings?).

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3.

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. price-eps-surprise | CenterPoint Energy, Inc. Quote

Alliant Energy (LNT - Free Report) came up with a four-quarter average negative earnings surprise of 85.31%. The company’s upcoming results are likely to reflect consistent growth in demand from the residential group along with an improvement in demand from the industrial and commercial players.

It makes continuous investments in technology for more cost-effective generation as well as the installation of electric-distribution projects. These efforts might have aided its quarterly earnings (read more: Alliant Energy to Post Q3 Earnings: What's in the Cards?).

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #4.

Alliant Energy Corporation Price and EPS Surprise

Alliant Energy Corporation Price and EPS Surprise

Alliant Energy Corporation price-eps-surprise | Alliant Energy Corporation Quote

NRG Energy (NRG - Free Report) came up with a four-quarter average earnings surprise of 4.26%. Solid demand from the residential players and improving demand from the Commercial and Industrial group are likely to aid the company’s upcoming results.

The debts reduced by the company might have lowered its debt-servicing costs, thereby boosting its third-quarter performance (read more: NRG Energy to Post Q3 Earnings: What's in the Cards?).

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3.

NRG Energy, Inc. Price and EPS Surprise