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Consolidated Edison (ED) Q2 Earnings: What's in the Cards?

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Consolidated Edison, Inc. (ED - Free Report) is set to report second-quarter 2018 results, after the market closes on Aug 2.

In the last reported quarter, the company delivered a positive earnings surprise of 3.01%. However, Consolidated Edison lagged the Zacks Consensus Estimate in two of the past four quarters, the average miss being 0.98%.

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

Factors at Play

At the onset of the second quarter, the company's major service territories witnessed colder-than-normal temperatures, alongside witnessing a snowstorm in April. This is likely to result in higher household expenditure on heating and, in turn, will most likely boost the revenues for this electricity provider.  

Also, midway during the quarter, the company’s service territories witnessed warmer-than-normal temperature, which again tend to spur electricity demand. Thus, climate during the quarter remained favorable for
the company’s revenue growth. In line with this, the Zacks Consensus Estimate for the company’s second-quarter revenues of $2,642 million reflects an improvement of 0.3% year over year.

In May, the company invested $1.5 billion in its electric delivery systems, using new technologies in New York City and Westchester County. Such massive investments made in the quarter may drive its expenditures, which, in turn, may weigh on its bottom line. As a result, the Zacks Consensus Estimate for the company’s second-quarter earnings of 57 cents reflects a decline of 1.7% year over year.

Consolidated Edison Inc Price and EPS Surprise

 

Consolidated Edison Inc Price and EPS Surprise | Consolidated Edison Inc Quote

Earnings Whispers

Our proven model does not show that Consolidated Edison is likely to beat on 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.

Earnings ESP: Consolidated Edison has an Earnings ESP of -0.89%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Consolidated Edison carries a Zacks Rank #3.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies from the Utility sector you may want to consider as our model shows that these have the right combination of elements to post earnings beat this quarter:

CenterPoint Energy (CNP - Free Report) has an Earnings ESP of +0.93% and a Zacks Rank #2. It is expected to report second-quarter 2018 results on Aug 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alliant Energy (LNT - Free Report) has an Earnings ESP of +1.10% and carries a Zacks Rank #2. It is slated to report second-quarter results on Aug 2.

Ameren Corporation (AEE - Free Report) has an Earnings ESP of +1.69% and carries a Zacks Rank #2. It is slated to report second-quarter results on Aug 3.

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