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Utility Stocks' Q1 Earnings Due on May 4: ATO,NI, PNW & More

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The Zacks Utilities sector is benefiting from the recovery in demand in the commercial and industrial group of customers post-pandemic. Improvement in economic conditions after the pandemic has generated fresh demand for utility services.

Utility companies focus on producing more electricity from clean sources and gradually shutting down coal-based production units. Courtesy of government incentives and a decline in expenses of utility-scale renewable power projects, quite a few companies have announced plans to achieve zero emissions by 2050.

Domestic-focused companies operating in the sector have benefited from various favorable factors. These are 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 transition toward cost-effective alternate sources of fuel to produce electricity.

Yet, the performance of capital-intensive utilities is likely to have been adversely impacted by an increase in interest rates from the near-zero levels. An increase in borrowing costs and the resultant rise in interest expenses is likely to have adversely impacted earnings of the companies operating in the space.

In the reported quarter, the utilities are expected to have benefited from higher demand. Cold winter months and above-average temperature in the month of March are expected to have boosted demand for electricity.

Per the current Earnings Trends report, the utility is among the 9 Zacks sectors that are expected to earn more in the first quarter than the year-ago period. Below we take a look at utility companies Atmos Energy (ATO - Free Report) , NiSource (NI - Free Report) , Pinnacle West Capital (PNW - Free Report) , Eversource Energy (ES - Free Report) and UGI Corporation (UGI - Free Report) to see how they are placed ahead of their earnings releases.

According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Atmos Energy Corporation’s earnings in fiscal second-quarter 2022 are likely to have benefited from new rates worth $28.9 million completed through Feb 28, 2022. Efficient management of expenses and a declining weighted average cost of debt are expected to have boosted margins of ATO. (Read more: Atmos Energy to Post Q2 Earnings: What's in the Offing?)

Our proven model doesn’t conclusively predict an earnings beat for Atmos Energy this time around. It has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Atmos Energy Corporation Price and EPS Surprise

Atmos Energy Corporation Price and EPS Surprise

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

NiSource’s first-quarter earnings are likely to have benefited from new gas rates effective in Kentucky during the three-month period under review, and in Maryland and Pennsylvania from the fourth quarter of 2021. These are expected to have boosted the upcoming earnings of NI. (Read more: NiSource to Post Q1 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for NiSource this time around. It has an Earnings ESP of 0.00% and a Zacks Rank of 3.

NiSource, Inc Price and EPS Surprise

NiSource, Inc Price and EPS Surprise

NiSource, Inc price-eps-surprise | NiSource, Inc Quote

Pinnacle West Capital Corporation’s first-quarter earnings are likely to have benefited from  solid demand from the commercial and residential groups, and an expanding retail customer base. However, the disappointing rate decision in 2021 is likely to have acted as a headwind for PNW’s first-quarter earnings.  ( Read more: What to Expect From Pinnacle West  in Q1 Earnings?)

Our proven model does not conclusively predict an earnings beat for Pinnacle West Capital this time around. PNW has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Eversource Energy’s first-quarter earnings are likely to have benefited from its transmission capital investment, reliability investment and capital recovery programs. First-quarter earnings of ES are likely to have gained from the contribution from its regulated businesses. (Read more: Eversource to Report Q1 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for Eversource Energy this time around. ES has an Earnings ESP of +0.41% and a Zacks Rank of 4 (Sell).

Eversource Energy Price and EPS Surprise

Eversource Energy Price and EPS Surprise

Eversource Energy price-eps-surprise | Eversource Energy Quote

UGI Corporation’s second-quarter fiscal 2022 earnings are likely to have benefited from a recovery in commodity prices, proper management of operating expenses and contribution from the acquired Stonehenge Appalachia assets.

Our proven model does not conclusively predict an earnings beat for UGI Corporation this time around. UGI has an Earnings ESP of 0.00% and a Zacks Rank of 5 (Strong Sell).

UGI Corporation Price and EPS Surprise

UGI Corporation Price and EPS Surprise

UGI Corporation price-eps-surprise | UGI Corporation Quote

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