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Utility Earnings to Watch on Nov 4: DUK, PCG, FE, AEE, AES

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The Q3 earnings season is well underway with 364 of the S&P 500 Index members having released results so far. Reported earnings were up 1.6% year over year on 1.6% higher revenues.

For the remaining 136 index members, projections are of a 2.4% improvement in earnings on 1.4% higher revenues despite an anticipated 65.4% plunge in earnings on 12.2% revenue deterioration in the energy space. Notably, this could be the first quarter to record positive earnings growth after five quarters of back-to-back declines.

Let us focus on the utility sector, which is characterized by its defensive nature and domestic orientation. Reported earnings in the sector so far have been up 15.9% year over year on 8.3% higher revenues.

The utility sector is also known for its capital-intensive nature. This is because these companies need huge capital for setting up generation facilities, and transmission and distribution infrastructure. They also require considerable funds for upgrading the existing systems to meet emission control standards.

Because of this, utilities have been benefiting from the rock-bottom interest rate environment. However, talks hinting at a rate hike before the end of the year could hamper the growth momentum of the sector. Nevertheless, we expect warmer-than-normal weather in the U.S. during the third quarter to boost sales to a large extent.

In the third quarter of 2016, sector earnings are expected to be up 13.8% on 5.3% higher revenues.

Four out of the 16 sectors in the Zacks coverage universe are expected to witness an earnings decline this season. Read more details in our weekly Earnings Preview report.

Let’s take a look at a few utilities that are scheduled to report quarterly numbers on Nov 4.

Duke Energy Corporation (DUK - Free Report) reported a positive earnings surprise of 5.94% in the previous quarter. The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Duke Energy’s Earnings ESP, which represents the difference between the Most Accurate estimate of $1.58 and the Zacks Consensus Estimate of $1.56, is +1.28%. According to our proven model, stocks with the combination of a positive ESP and a Zacks Rank #1, #2 (Buy) or #3 have increased chances of beating estimates. (Read more: Is a Beat in Store for Duke Energy in Q3 Earnings?)

DUKE ENERGY CP Price and EPS Surprise

 

DUKE ENERGY CP Price and EPS Surprise | DUKE ENERGY CP Quote

PG&E Corporation (PCG - Free Report) reported a negative earnings surprise of 29.79% in the prior quarter. The company currently carries a Zacks Rank #3.

The Earnings ESP for PG&E Corp. is -1.71%. This is because the Most Accurate estimate is $1.15, while the Zacks Consensus Estimate stands at $1.17. (Read more: PG&E Corp Q3 Earnings: What's Ahead for the Stock?)

PG&E CORP Price and EPS Surprise

 

PG&E CORP Price and EPS Surprise | PG&E CORP Quote

FirstEnergy Corp. (FE - Free Report) reported a positive earnings surprise of 5.66% last quarter. The company currently carries a Zacks Rank #3.

FirstEnergy has an Earnings ESP of +2.63% as the Most Accurate estimate stands at 78 cents, while the Zacks Consensus Estimate is pegged at 76 cents. (Read more: FirstEnergy Q3 Earnings: Stock to Post a Beat Again?)

FIRSTENERGY CP Price and EPS Surprise

 

FIRSTENERGY CP Price and EPS Surprise | FIRSTENERGY CP Quote

Ameren Corporation (AEE - Free Report) reported a positive earnings surprise of 15.09% in the previous quarter. The company currently carries a Zacks Rank #3.

Ameren Corp.’s Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.38. Earlier though, our model had predicted an earnings beat. (Read more: Ameren Corp Q3 Earnings: Stock to Beat Estimates?)

AMEREN CORP Price and EPS Surprise

 

AMEREN CORP Price and EPS Surprise | AMEREN CORP Quote

The AES Corporation (AES - Free Report) reported a negative earnings surprise of 5.56% in the prior quarter. The company currently carries a Zacks Rank #3.

AES Corp.’s Earnings ESP, which represents the difference between the Most Accurate estimate of 33 cents and the Zacks Consensus Estimate of 32 cents, is +3.13%. (Read more: AES Corp: A Beat in the Cards this Earnings Season?)

AES CORP Price and EPS Surprise

 

AES CORP Price and EPS Surprise | AES CORP Quote

Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

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