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CenterPoint Energy (CNP) to Post Q4 Earnings: What's in Store?

Zacks Equity Research

CenterPoint Energy, Inc. CNP is set to report fourth-quarter and 2018 results on Feb 28, before the opening bell.

In the last reported quarter, the company witnessed a negative earnings surprise of 4.88%. However, it surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average beat being 5.97%.

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

Factors Under Consideration

CenterPoint Energy's major service territories experienced warmer-than-normal winter in the fourth quarter. This, in turn, is likely to impair demand for electricity, resulting in decreased household expenditure for heating.

However, rate relief and customer growth are expected to boost the company’s top line in the quarter to be reported.

The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $2.66 billion, reflecting a 0.8% increase year over year.

In the third quarter, CenterPoint Energy's earnings benefited from lower federal income tax rate related to the latest U.S. tax reform along with utility rate relief and customer growth. This trend is expected to boost its bottom line in the fourth quarter as well.

Moreover, factors like rate relief, lower federal income tax rate related to tax reform, midstream investments and customer growth are expected to steadily bolster CenterPoint’s earnings in the soon-to-be-reported quarter. The Zacks Consensus Estimate for fourth-quarter earnings stands at 36 cents, reflecting an annual improvement of 9.1%.

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. Price and EPS Surprise | CenterPoint Energy, Inc. Quote

Earnings Whispers

Our proven model does not show an earnings beat for CenterPoint Energy this quarter. That 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. That is not the case here, as you will see below.

Earnings ESP: CenterPoint Energy 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, which along with an Earnings ESP of 0.00%, makes surprise prediction difficult.

Note that 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.

Upcoming Utilities

Edison International EIX has a Zacks Rank #3. The company is slated to report fourth-quarter 2018 results on Feb 28. You can see the complete list of today’s Zacks #1 Rank stocks here.

PNM Resources, Inc. PNM carries a Zacks Rank #3. The company is slated to report fourth-quarter 2018 results on Feb 27.

PG&E Corp. PCG carries a Zacks Rank #3. The company is slated to report fourth-quarter 2018 results on Feb 28.

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