Back to top

Image: Bigstock

What's in Store for CenterPoint Energy (CNP) in Q4 Earnings?

Read MoreHide Full Article

CenterPoint Energy, Inc. (CNP - Free Report) is slated to report fourth-quarter 2021 results on Feb 22 before the opening bell.

In the last-reported quarter, the company delivered an earnings surprise of 13.79%. CenterPoint Energy has a trailing four-quarter earnings surprise of 25.47%, on average.

Factors to Note

The majority of CNP’s service territories experienced warmer-than-normal temperatures in October, accompanied by heavy rainfall in Texas. This must have boosted demand for electricity from the utility’s consumers, which is expected to have contributed favorably to revenues during the fourth quarter.

CenterPoint Energy’s service territories experienced below-normal temperatures accompanied by slight snowfall and above-normal precipitation in some parts in November and December.

However, severe weather conditions, including a few tornadoes in some parts of its service territories, may have disrupted CenterPoint’s services in those areas. This resulted in outages for its customers, which might have impacted revenues in the to-be-reported quarter.

Overall, the impact of weather conditions is expected to have been mixed on the company’s soon-to-be-reported quarter’s revenues.

Meanwhile, the favorable growth in rate recovery must have bolstered its top line.

The Zacks Consensus Estimate for CNP’s fourth-quarter revenues is pegged at $2.11 billion, suggesting growth of 2.6% from the year-ago quarter’s reported figure.

The company’s five-year plan that emphasizes investments in regulated businesses is likely to have added impetus to its fourth-quarter earnings. Moreover, the commitment of a 1% to 2% annual reduction in operation and maintenance expenses over the five-year period may have had contributed favourably, thereby boosting its fourth-quarter bottom line.

However, the impact of severe weather conditions mentioned above might have damaged some of the utility’s properties, thereby pushing up its quarterly costs for restoration work. This, in turn, might have partially hurt earnings in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 33 cents per share, indicating a surge of 13.8% from the prior-year reported figure.

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. Price and EPS Surprise

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

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for CenterPoint Energy this time. 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. However, that is not the case here.

The company has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are two Utilities that you may want to consider as these have the right combination of elements to post an earnings beat this season:

Public Service Enterprise Group Incorporated (PEG - Free Report) has an Earnings ESP of +0.37% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

It boasts a long-term earnings growth rate of 3.6%. The Zacks Consensus Estimate for Public Service Enterprise Group’s fourth-quarter sales and earnings is pegged at $2.50 billion and 68 cents per share, respectively. PEG has a four-quarter average earnings surprise of 4.57%.

American Electric Power Company, Inc. (AEP - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #2. American Electric boasts a long-term earnings growth rate of 5.7%.

The Zacks Consensus Estimate for the company’s fourth-quarter sales and earnings is pegged at $4.02 billion and 94 cents per share, respectively. AEP has a four-quarter average earnings surprise of 1.61%.

Upcoming Release

AES Corp (AES - Free Report) has an Earnings ESP of -1.75% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for its fourth-quarter earnings, pegged at 43 cents per share, implies a decline of 10.4% from the prior-year quarter’s reported figure.

AES Corp. boasts a long-term earnings growth rate of 7.2%. AES has a four-quarter earnings surprise of 4.50%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.