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Utility Stock Q4 Earnings to Watch on Feb 24: AEP, EIX & More

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Only a handful of the S&P 500 members from the Zacks Utilities sector, specifically 32.1%, have reported their Q4 results, so far. Of these, 33.3% of the utility companies have come up with an earnings beat, while 66.7% posted a revenue beat.

Factors Likely to Have Influenced Q4 Performance

Factors like new electric rates, customer additions, cost management, implementation of energy-efficiency programs, ongoing investments to improve the resilience of the electric infrastructure against extreme weather conditions and their transition toward cost-effective alternate sources of fuel to produce electricity have been significantly boosting Utilities stocks. Moreover, companies have been investing in transmission and distribution lines, adding more renewable assets to their generation portfolio, and making the system more resilient to withstand inclement weather conditions and providing 24X7 services to consumers.

The continuation of near-zero interest rates has been aiding domestic-focused capital-intensive companies to get funds at low costs to carry on with infrastructure strengthening work. Such developments must have boosted the fourth-quarter performance of Utilities stocks.

Per the National Oceanic and Atmospheric Administration release, the December contiguous U.S. temperature was 39.3 degrees F, 6.7 degrees above average, making it the warmest December on record. Such warmer-than-normal weather conditions in December 2021 might have adversely impacted Q4 demand for utility services to some extent.

Q4 Expectations

Total Q4 earnings of Utility stocks are expected to drop 1.5% year over year on 10.5% 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 Feb 24.

American Electric Power Company, Inc.’s (AEP - Free Report) earnings surpassed the Zacks Consensus Estimate in the last four quarters, with the average earnings surprise being 1.61%. During most of the fourth quarter, AEP’s service territories witnessed mixed weather patterns. Also, the rebounding commercial and industrial load due to the economic recovery observed over the past few months might have contributed to the company’s performance in the quarter to be reported.

The company’s cost management initiatives, higher margins, along with lower net interest expenses and income taxes may have aided its bottom-line performance in the fourth quarter (read more: What's in Store for American Electric in Q4 Earnings?).

Our proven model predicts 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.

The company has an Earnings ESP of +0.43% and carries a Zacks Rank #3.

Edison International (EIX - Free Report) has a trailing four-quarter negative earnings surprise of 2.08%, on average. The overall impact of the weather pattern on the company’s revenues is likely to have been mixed. Meanwhile, the recovery observed in the commercial and industry load, buoyed by economic growth, may have contributed to Edison International’s fourth-quarter top line.

The impairment loss and other costs related to the sale of its Power's Fossil fleet may have continued to negatively impact earnings in the fourth quarter. Additionally, an unfavorable tax impact is likely to dampen earnings of the company in the soon-to-be-reported quarter (read more: What's in Store for Edison International in Q4 Earnings?).

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #4. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Edison International Price and EPS Surprise

Edison International Price and EPS Surprise

Edison International price-eps-surprise | Edison International Quote

NRG Energy (NRG - Free Report) has a trailing four-quarter negative earnings surprise of 72.10%, on average. Its quarterly earnings are likely to have benefited from strong residential demand. NRG continues to benefit from synergies created by the Direct Energy acquisition.

The company’s fourth-quarter earnings are likely to have been adversely impacted by unanticipated supply-chain constraints (read more: NRG Energy to Post Q4 Earnings: What's in the Offing?).

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

NRG Energy, Inc. Price and EPS Surprise

NRG Energy, Inc. Price and EPS Surprise

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

TransAlta (TAC - Free Report) came up with a four-quarter average negative earnings surprise of 438.65%. The Zacks Consensus Estimate for fourth-quarter earnings, pegged at 5 cents, suggests growth of 129.4% from the year-ago quarter’s reported earnings.

The company has an Earnings ESP of +100.00% and carries a Zacks Rank #3.

TransAlta Corporation Price and EPS Surprise

TransAlta Corporation Price and EPS Surprise

TransAlta Corporation price-eps-surprise | TransAlta Corporation Quote

California Water Service Group (CWT - Free Report) came up with a four-quarter average earnings surprise of 10.79%. The increase in unbilled revenues is expected to have positively impacted the company’s fourth-quarter earnings.

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (read more: What to Expect From California Water in Q4 Earnings?).

Primo Water (PRMW - Free Report) came up with a four-quarter average earnings surprise of 1.61%. The Zacks Consensus Estimate for fourth-quarter earnings, pegged at 20 cents, suggests growth of 42.9% from the year-ago quarter’s reported earnings.

The company has an Earnings ESP of -20.99% and carries a Zacks Rank #3.

Primo Water Corporation Price and EPS Surprise

Primo Water Corporation Price and EPS Surprise

Primo Water Corporation price-eps-surprise | Primo Water Corporation Quote

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