Back to top

Image: Bigstock

Is a Beat in Store for Pinnacle West (PNW) in Q1 Earnings?

Read MoreHide Full Article

We expect Pinnacle West Capital Corporation (PNW - Free Report) to beat expectations when it reports first-quarter 2017 results before the opening bell on May 2. Last quarter, this independent utility company reported a negative earnings surprise of 4.08%.

Why a Likely Positive Surprise?
Our proven model shows that Pinnacle West Capital is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates and Pinnacle West Capital has the right mix.

Zacks ESP: The Most Accurate estimate is pegged at 15 cents while the Zacks Consensus Estimate is pegged lower at 14 cents resulting in an Earnings ESP of +7.14%. This is a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Pinnacle West Capital carries a Zacks Rank #3. The combination of Pinnacle West Capital’s favorable Zacks Rank and positive ESP makes us reasonably confident of a positive surprise this season.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors to Consider

The strong economic condition in Pinnacle West Capital’s service territories is likely to boost demand for utility services and drive earnings in the first quarter. Thanks to the ongoing economic improvement the company expects that annual retail electricity sales in kilowatt-hour will increase in the range of 0-1.0% for 2017.

We anticipate its initiatives toward modernizing the distribution grid and savings in customer bills through participation in wholesale energy market will help to further expand customer base in first quarter.

Pinnacle West Capital Corporation Price, Consensus and EPS Surprise


Other Stocks to Consider

Pinnacle West Capital is not the only company Utility - Electric Power industry looking up this earnings season. We see likely earnings beats coming from these companies as well:

NiSource, Inc (NI - Free Report) has an Earnings ESP of +3.08% and a Zacks Rank #2. The company is expected to release first-quarter 2017 results on May 3, before the market opens.

PPL Corporation (PPL - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3. The company is expected to release first-quarter 2017 results on May 4, before the opening bell.

Dominion Resources Inc. (D - Free Report) has an earnings ESP of +2.15% and a Zacks Rank #3. It is expected to report first-quarter 2017 earnings on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells."
Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>

Published in