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CMS Energy (CMS) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

CMS Energy Corporation CMS is set to report second-quarter 2019 financial results on Jul 25, before the market opens. In the last reported quarter, the company delivered a negative earnings surprise of 2.60%.

In the trailing four quarters, CMS Energy came up with average positive earnings surprise of 3.89%.

Let's take a closer look at the factors influencing the company’s upcoming quarterly results.

Factors Under Consideration

During most of the second quarter of 2019, the company’s service territories experienced below-normal temperatures along with freezing weather conditions. Alongside cold temperatures, its service territories witnessed significant wet weather conditions along with occasional snowfall. These are likely to result in higher electricity demand, which in turn should drive CMS Energy’s top line in the second quarter.

In the first-quarter earnings call, the company mentioned the settlement agreement for its gas and electric rate cases along with the settlement of its integrated resource plan. Such favorable rate case outcomes are likely to benefit CMS Energy’s bottom line.

However, the company has been witnessing a rise in income tax expenses for the past couple of quarters. We expect similar trends to continue in the to-be-reported quarter, which in turn might hurt the company’s bottom line.

For the second quarter, the Zacks Consensus Estimate for earnings is pegged at 48 cents, which is in line with the figure reported in the year-ago quarter.

Earnings Whispers

Our proven model does not conclusively show that CMS Energy 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: CMS Energy has an Earnings ESP of -19.46%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

CMS Energy Corporation Price and EPS Surprise


CMS Energy Corporation Price and EPS Surprise

CMS Energy Corporation price-eps-surprise | CMS Energy Corporation Quote

Stocks to Consider

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

Entergy Corporation ETR has an Earnings ESP of +1.4% and a Zacks Rank #2. The company is expected to release second-quarter 2019 results
on Jul 31.

The Southern Company SO has an Earnings ESP of +0.46% and a Zacks Rank #3. The company is expected to release second-quarter results on Jul 31.

NextEra Energy, Inc. NEE has an Earnings ESP of +1.41% and a Zacks Rank #3. The company is scheduled to release second-quarter results on Jul 24.

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