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Sempra Energy (SRE) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

Sempra Energy SRE is set to report third-quarter 2019 results on Nov 1, before market open.

In the last reported quarter, the company delivered a negative earnings surprise of 7.56%. However, its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 5.26%.

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

Factors at Play

Sempra Energy’s service territories witnessed above-average temperatures for most parts of the third quarter. As a result, increased electricity demand in its service territory might have boosted the company’s top line.

However, throughout the third quarter, Sempra Energy experienced severe wildfire across California. Since July, numerous fires broke out across the region, many of which continued till August. Several new fires also erupted in September. These led to significant power outages during the quarter, which is likely to show on the company's top line in the upcoming quarterly results.

For quarterly revenues, the Zacks Consensus Estimate stands at $2.92 billion, suggesting a 0.6% drop from the year-ago quarter’s reported figure.

In May, Sempra Energy’s subsidiary, Oncor, acquired 100% of the equity interests of InfraREIT Inc, for approximately $1.28 billion. The company expects this acquisition to be accretive to earnings and hence this is likely to have contributed to its bottom line in the third quarter. Additionally, an anticipated increase in pipeline activities might have favorably impacted the bottom line.

In line with such developments, the Zacks Consensus Estimate for third-quarter earnings is pegged at $1.49 per share, indicating 21.1% growth from the year-ago quarter’s reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Sempra Energy this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Sempra Energy has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sempra Energy Price and EPS Surprise

Sempra Energy Price and EPS Surprise

Sempra Energy price-eps-surprise | Sempra Energy Quote

Stocks That Warrant a Look

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

PPL Corporation PPL is scheduled to release third-quarter 2019 results on Nov 5. It has an Earnings ESP of +1.37% and a Zacks Rank of 3.

Exelon Corporation EXC has an Earnings ESP of +0.06% and a Zacks Rank #3. The company is scheduled to release third-quarter 2019 results on Oct 31.

Eversource Energy ES is scheduled to release third-quarter 2019 results on Nov 6. It has an Earnings ESP of +1.06% and a Zacks Rank of 2.

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