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Utility Stocks' Earnings Due on Aug 3: ETR, ATO, EXC & More

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Domestic-focused companies in the Zacks Utilities sector are expected to have benefited from a revival of demand from the commercial and industrial groups of customers. An improvement in economic conditions after the pandemic has been generating fresh demand for utility services.

Utilities have been focusing on cost management and the implementation of energy-efficiency programs to offset the impacts of inflationary pressure. New rates and customer additions have been creating fresh demand as well as assisting the utilities. Investments in strengthening the infrastructure have been allowing the utilities to provide services even during extreme conditions, leading to stable earnings.

Utilities have been gradually moving toward clean fuel sources to produce electricity and lower emissions. The stringent regulation to reduce emissions, and the high cost of conventional fuel and government incentives for the use of clean fuel have also been urging the utilities to take a decision and focus more on clean energy sources. Many utilities have pledged to provide 100% electricity from clean sources in the next few decades.

The performance of the capital-intensive utilities is likely to have been adversely impacted by the increase in interest rates from the near-zero levels.

Per the updated outlook of National Oceanic and Atmospheric Administration, the summer of 2022 has been expected to be drier and hotter than normal temperatures, undoubtedly leading to higher demand for water and electricity for cooling purposes, benefiting the utilities.

Per the latest Earnings Trends report, the utility sector’s second-quarter earnings are expected to decline 5.4%, while revenues are estimated to improve 0.1%.

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 see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Entergy Corporation’s (ETR - Free Report) second-quarter earnings are likely to have benefited from favorable weather and strong retail sales volume. In contrast, higher shares outstanding volume than the prior-year quarter’s reported figure is expected to have diluted its earnings. (Read more: Entergy to Report Q2 Earnings: What's in the Cards?)

Our proven model conclusively predicts an earnings beat for Entergy this time around. ETR has an Earnings ESP of +0.35% and a Zacks Rank of 3.

Entergy Corporation Price and EPS Surprise

 

Entergy Corporation Price and EPS Surprise

Entergy Corporation price-eps-surprise | Entergy Corporation Quote

Atmos Energy Corporation (ATO - Free Report) is likely to have benefited in third-quarter fiscal 2022 from new rates worth $29.6 million completed through May 4, 2022. Atmos Energy’s fiscal third-quarter earnings are likely to have gained from greater demand from the expanding customer base in the distribution segment. (Read more: Atmos Energy to Post Q3 Earnings: What's in the Cards?)

Our proven model conclusively predicts an earnings beat for Atmos Energy this time around. ATO has an Earnings ESP of +1.35% and a Zacks Rank of 2 (Buy).

Atmos Energy Corporation Price and EPS Surprise

 

Atmos Energy Corporation Price and EPS Surprise

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

Exelon Corporation’s (EXC - Free Report) second-quarter earnings are likely to have gained from cost management, strong demand from commercial and industrial customers, and decoupled distribution rates, which reduce volumetric risk. (Read more: Exelon to Report Q2 Earnings: What's in the Cards?)

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

Exelon Corporation Price and EPS Surprise

 

Exelon Corporation Price and EPS Surprise

Exelon Corporation price-eps-surprise | Exelon Corporation Quote

Pinnacle West Capital Corporation’s (PNW - Free Report) second-quarter earnings are likely to have gained from the ongoing economic development in the Phoenix region. An expanding retail customer base is likely to have boosted demand. However, second-quarter earnings are anticipated to have been adversely impacted by inflationary pressures across all areas of PNW’s business. (Read more: What to Expect From Pinnacle West in Q2 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.

PPL Corporation’s (PPL - Free Report) second-quarter earnings are likely to have benefited from the ongoing economic development in its service territories. A reduction in the long-term debt balance is likely to have reduced capital servicing costs and boosted margins in the second quarter. However, second-quarter results are likely to have been adversely impacted by higher operation and maintenance expenses. (Read more: PPL Readies to Report Q2 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for PPL this time around. PPL has an Earnings ESP of 0.00% and a Zacks Rank of #4 (Sell).

PPL Corporation Price and EPS Surprise

 

PPL Corporation Price and EPS Surprise

PPL Corporation price-eps-surprise | PPL Corporation Quote

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