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What's in Store for Consolidated Edison (ED) in Q4 Earnings?

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Consolidated Edison Inc (ED - Free Report) is scheduled to release fourth-quarter and 2019 results on Feb 20, after market close.

In the last reported quarter, the company delivered a negative earnings surprise of 3.14%. Moreover, in the trailing four quarters, Consolidated Edison came up with average negative earnings surprise of 0.73%.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors to Consider

During the fourth quarter, the majority of Consolidated Edison’s service territories witnessed above-average warm weather at the onset, while in the latter part, record cold temperature prevailed accompanied with above-normal snowfall. Such weather pattern must have led to higher electricity demand, which, in turn, is expected to have contributed to the company’s fourth-quarter revenue growth.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $3.03 billion that indicates 2.8% increase from the year-ago quarter’s reported figure.

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc price-eps-surprise | Consolidated Edison Inc Quote

Such positive revenue growth must have boosted the company’s earnings in the fourth quarter. However, the hypothetical liquidation at book value (HLBV) method of accounting for the Tax Equity Projects might weigh on Consolidated Edison’s bottom line in the soon-to-be-reported quarter.

Moreover, the company’s service territories experienced coastal flooding, storm as well as record snowfall. This may have pushed up its expenses, which is expected to get reflected in the upcoming results.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.59 per share that indicates 1.9% increase from the year-ago quarter reported figure.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Consolidated Edison this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: The company’s Earnings ESP is -1.05%. 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are a few players from the Utilities sector that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Public Service Enterprise Group PEG has an Earnings ESP of +2.01% and a Zacks Rank #3. The company is set to announce fourth-quarter 2019 earnings on Feb 26.

The AES Corp AES has an Earnings ESP of +0.76% and a Zacks Rank #3. The company will announce fourth-quarter 2019 earnings on Feb 28.

CenterPoint Energy CNP has an Earnings ESP of +1.09% and a Zacks Rank #3. The company will announce fourth-quarter 2019 earnings on Feb 27.

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