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PPL Corp (PPL) Q4 Earnings: Will the Stock Pull a Surprise?

Zacks Equity Research

Diversified utility PPL Corporation PPL is scheduled to report fourth-quarter results on Feb 1, before the market opens. Last quarter, the company’s earnings recorded a positive earnings surprise of 6.78%. Let’s see how things are shaping up for this quarter.

Factors to Consider

Above-average temperatures in PPL Corp.’s service territories in the U.S. are expected to hit its top line.

PPL Corp. is sufficiently hedged for the next three years, which means that its top line is cushioned from the impact of an economic recession in the UK that might follow the Brexit episode. Further, the company is likely to experience strong earnings growth in the fourth quarter of 2016 driven by lower operations and maintenance expenses in the UK.

Earnings Whispers

Our proven model does not conclusively show that PPL Corp. will beat earnings 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. But that is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 52 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PPL Corporation Price and EPS Surprise

 

PPL Corporation Price and EPS Surprise | PPL Corporation Quote

Zacks Rank: Though PPL Corporation’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

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

Stocks to Consider

Here are a few stocks in the utility space worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Black Hills Corporation BKH is slated to report earnings on Feb 1. It is has an Earnings ESP of +7.07% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exelon Corporation EXC has an Earnings ESP of +2.27% and a Zacks Rank #2. It is expected to release its quarterly numbers on Feb 8.

Pinnacle West Capital Corporation PNW has an Earnings ESP of +4.08% and a Zacks Rank #2. It is slated to report earnings on Feb 24.

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Pinnacle West Capital Corporation (PNW): Free Stock Analysis Report
 
Exelon Corporation (EXC): Free Stock Analysis Report
 
Black Hills Corporation (BKH): Free Stock Analysis Report
 
PPL Corporation (PPL): Free Stock Analysis Report
 
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