Back to top

Image: Bigstock

What Awaits Public Service Enterprise (PEG) in Q1 Earnings?

Read MoreHide Full Article
Public Service Enterprise Group Inc. (PEG - Free Report) is scheduled to report first-quarter 2019 results on May 2, before the opening bell.
 
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 1.82%. The bottom line also exceeded the consensus mark in three of the trailing four quarters, the average beat being 1.82%.
 
Let’s see how things are shaping up for this announcement.
 
Factors at Play
 
The company’s service territories experienced below-normal temperature during most part of the first quarter, characterized by excessive cold winters along with heavy snowstorms and strong winds. The severity of such weather conditions resulted in prolonged power outages, which, in turn, may have unfavorably impact the company’s top line in the upcoming quarterly results.
 
In line with this, the Zacks Consensus Estimate for Public Service Enterprise’s first-quarter revenues is pegged at $2.78 billion, suggesting a decline of 1.41% from the figure reported in the year-ago quarter.
 
Public Service Enterprise’s business mix is expected to boost its 2019 earnings, driven by a higher contribution from regulated earnings at the utility and incremental contribution from its three new combined-cycle gas turbine (CCGT) units. Such developments and projections may turn out to be beneficial for the company's upcoming quarterly earnings as well.
 
Furthermore, the company's effective cost control and lower corporate tax rate at PSEG power are expected to consistently drive the bottom line. In line with such developments, the Zacks Consensus Estimate for the company’s first-quarter earnings stands at 99 cents, indicating a 2.1% rise from the year-ago quarter’s reported figure.
 
Also during the quarter, Public Service Enterprise acquired two North Carolina solar farms from BayWa r.e. for approximately $65 million, which are expected to be operational from the fourth quarter of 2019. We expect further updates on these deals with the release of the first-quarter results.
 
Earnings Whisper
 
Our proven model does not conclusively show that Public Service Enterprise is likely to beat on earnings in the fourth 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. 
 
Earnings ESP: Public Service Enterprise has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
Zacks Rank: The company currently carries a Zacks Rank #3.  
 
Conversely, 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.

Public Service Enterprise Group Incorporated Price and EPS Surprise

 
Here are a few stocks from the Utilities sector that have the right combination of elements to post an earnings beat this quarter.
 
Pinnacle West Capital Corp. (PNW - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank #2. The company is scheduled to report first-quarter results on May 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
PPL Corporation (PPL - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #3. The company is scheduled to report first-quarter results on May 2.
 
Entergy Corporation (ETR - Free Report) has an Earnings ESP of +3.99% and a Zacks Rank #3. The company is scheduled to report first-quarter results on May 1.
 
Is Your Investment Advisor Fumbling Your Financial Future?
 
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.”