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Sempra Energy (SRE) to Report Q4 Earnings: What's in Store?

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Sempra Energy SRE is set to report fourth-quarter and 2019 results on Feb 27, before market open.

In the last reported quarter, the company delivered a positive earnings surprise of 0.67%. Moreover, its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 3.21%.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

Sempra Energy’s service territories witnessed above-normal warm temperatures at the onset of the fourth quarter, while at the end of the quarter below-average cold temperatures prevailed. However, heavy rainfall caused heavy precipitation in various parts of the company’s operational regions. As a result, temperature did not act as a growth catalyst for Sempra Energy’s results in the soon-to-be-reported quarter.

Moreover, during the fourth quarter, severe wildfire affected parts of California. These must have led to significant power outages, which in turn, are likely to have weighed on the company's performance.

For quarterly revenues, the Zacks Consensus Estimate stands at $3.08 billion, suggesting a 4.3% decline from the year-ago quarter reported figure.

Sempra Energy Price and EPS Surprise

Sempra Energy Price and EPS Surprise

Sempra Energy price-eps-surprise | Sempra Energy Quote

Sempra Energy is expected to have incurred costs related to the wildfire that disrupted smooth flow of electricity to its customers in the soon-to-be-reported quarter. Such costs may have dragged down its quarterly bottom line. Nevertheless, constructive GRC decision at California Utilities as well as robust proceeds expected from the announced sale of its South American businesses are likely to have boosted Sempra Energy’s earnings in the fourth quarter.

Currently, the Zacks Consensus Estimate for fourth-quarter earnings, pegged at $1.31 per share, indicates 16% growth from the year-ago quarter reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Sempra Energy this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Sempra Energy has an Earnings ESP of -4.22% and a Zacks Rank #2. 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.

Ameren Corp AEE has an Earnings ESP of +4.92% 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 +3.82% and a Zacks Rank #3. The company is scheduled to announce fourth-quarter 2019 earnings on Feb 28.

CenterPoint Energy CNP has an Earnings ESP of +6.56% and a Zacks Rank #3. The company is set to announce fourth-quarter 2019 earnings on Feb 27.

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