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Public Service Enterprise (PEG) Earnings Preview for Q2

Zacks Equity Research

Public Service Enterprise Group Inc. PEG is scheduled to report second-quarter 2019 results on Jul 30, before the opening bell.
 
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 9.09%. The bottom line also exceeded the consensus mark in three of the trailing four quarters, the average positive surprise being 4.35%.
 
Let’s see how things are shaping up for this announcement.
 
Factors at Play

A majority of the company’s service territories experienced warmer-than-normal temperature during most part of the second quarter. Additionally, its service territories witnessed significant wet weather conditions throughout the quarter. These are likely to result in higher electricity demand, which, in turn, may have favorably impacted the company’s top line in the second quarter.

In line with this, the Zacks Consensus Estimate for Public Service Enterprise’s second-quarter revenues is pegged at $2.23 billion, suggesting a rise of 10.8% from the figure reported in the year-ago quarter.

Last year, the federal corporate tax rate was reduced, resulting in a decrease in the company's effective income tax rates. Public Service Enterprise has started passing on these benefits in the form of tax-reform savings to its customers, which, in turn, has been bringing down their electricity bills. While such flow back of deferred taxes might boost the company’s customer base, lower bills generating from the same tend to impact its bottom line in the to-be-reported quarter.

In line with this, the Zacks Consensus Estimate for the company’s second-quarter earnings stands at 62 cents, indicating a 3.1% decline from the year-ago quarter’s reported figure.

Earnings Whisper
 

Our proven model does not conclusively show that Public Service Enterprise is likely to beat on earnings in the second 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: Public Service Enterprise has an Earnings ESP of -0.97%. 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 #4 (Sell).  
 
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Public Service Enterprise Group Incorporated Price and EPS Surprise

 

Public Service Enterprise Group Incorporated Price and EPS Surprise

Public Service Enterprise Group Incorporated price-eps-surprise | Public Service Enterprise Group Incorporated 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 +1.40% and a Zacks Rank #2. The company is expected to release second-quarter 2019 results on Jul 31. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Black Hills Corporation BKH is scheduled to release second-quarter results on Aug 5. It has an Earnings ESP of +0.75% and a Zacks Rank of 3.
 
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Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report
 
Southern Company (The) (SO) : Free Stock Analysis Report
 
Black Hills Corporation (BKH) : Free Stock Analysis Report
 
Entergy Corporation (ETR) : Free Stock Analysis Report
 
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