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Is Consolidated Edison (ED) Poised to Beat on Q1 Earnings?

Zacks Equity Research

Consolidated Edison ED is set to release first-quarter 2019 results on May 2, after the market closes.

 

In the last reported quarter, the company delivered a positive earnings surprise of 1.32%. Moreover, Consolidated Edison surpassed the Zacks Consensus Estimate in the trailing four quarters, the average beat being 4.19%.

 

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

 

Why a Likely Positive Surprise?
 

Our proven model shows that Consolidated Edison is likely to beat earnings estimates in the first quarter. Notably, 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.
 

Earnings ESP: Consolidated Edison has an Earnings ESP of +0.07%. 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, which along with a positive Earnings ESP increases the possibility of an earnings beat.

 

Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

 

Consolidated Edison Inc Price and EPS Surprise
 

Consolidated Edison Inc Price and EPS Surprise | Consolidated Edison Inc Quote

Factors in Play

During the first quarter, major parts of New York experienced below-average and below- normal temperatures, subsequently witnessing cold winters characterized by heavy snowstorms. This, in turn, will result in higher household expenditure on heating, which may have a favorable impact on the company’s revenues in the upcoming results.

 

In line with this, the Zacks Consensus Estimate of $3.39 billion for the company’s first-quarter sales suggests a rise of 0.9% from the year-ago quarter’s reported figure.

 

Consolidated Edison’s regulated utilities continue to provide it with a stable earnings base coupled with positive outcomes from the rate hike appeal by its utilities. In 2018, the company's results of operations reflected lower income tax expenses compared to that in 2017. We anticipate to witness a similar trend in the upcoming quarterly results as well. 

 

Considering this, the Zacks Consensus Estimate for Consolidated Edison’s first-quarter earnings of $1.38 calls for a marginal rise of 0.7% from the figure reported in the year-ago quarter.

 

Other Stocks to Consider

 

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

 

Pinnacle West Capital Corp. PNW 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 Corp. PPL 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 Corp. ETR has an Earnings ESP of +3.99% and a Zacks Rank #2. The company is scheduled to report first- quarter results on May 1.

 

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Consolidated Edison Inc (ED) : Free Stock Analysis Report
 
PPL Corporation (PPL) : Free Stock Analysis Report
 
Entergy Corporation (ETR) : Free Stock Analysis Report
 
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
 
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