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Public Service Enterprise (PEG) Q2 Earnings: What to Expect?

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Public Service Enterprise Group Inc. (PEG - Free Report) is scheduled to report second-quarter 2017 results on Jul 28, before the opening bell.

Last quarter, the utility’s earnings surpassed the Zacks Consensus Estimate by 9.52%. Moreover, Public Service Enterprise outperformed the same in the trailing four quarters with an average positive surprise of 5.50%.

Let’s see how things are shaping up for this announcement.

Factors at Play

During the first-quarter earnings call, Public Service Enterprise said that in the second quarter its key subsidiary, Power, will be impacted by incremental depreciation expenses related to the early retirement of the Hudson and Mercer coal-fired generating stations on Jun 1.

However, the company's service territories witnessed warmer-than-normal temperatures during the to-be-reported quarter. This, in turn, will result in higher household expenditures on heating, which is expected to drive revenues.

Additionally, the unemployment rate in Public Service Enterprise’s service territories is better than the national average. An improving economy is likely to boost future utility demand in the state, thereby improving the company’s performance.

Overall, for the second quarter, the Zacks Consensus Estimate for earnings reflects year-over-year growth of 0.35%, while revenues are pegged at $2.33 billion depicting an increase of 22.49%.

Earnings Whispers

Our proven model does not conclusively show that Public Service Enterprise will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Zacks ESP: Public Service Enterprise has an Earnings ESP 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 57 cents.  You can uncover the best stocks to buy or sell before they’re reported with our EarningsESP Filter

Zacks Rank: Public Service Enterprise’s Zacks Rank #3, when combined with an ESP of 0.00%, makes our surprise prediction difficult for this quarter.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.

Stocks to Consider

Here are a few stocks in the Utility space worth considering on the basis of our model, which shows that they have the right combination to pull off a beat:

NiSource, Inc. (NI - Free Report) will report second-quarter results on Aug 2. The company has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pattern Energy Group, Inc. (PEGI - Free Report) has an Earnings ESP of +23.08% and a Zacks Rank #2. The company is expected to report second-quarter results on Aug 4.

Pinnacle West Capital Corporation (PNW - Free Report) has an Earnings ESP of +4.31% and a Zacks Rank #3. The company is slated to release second-quarter results on Aug 3.

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