Utilities Due to Report Q3 Earnings on Oct 26: FE, PCG & More
The Zacks Utilities sector’s third-quarter 2023 earnings are expected to have been driven by warmer weather conditions, new utility rates and usage of new technologies that assisted in reducing operating expenses.
Per the latest Earnings Preview, the Zacks Utilities sector’s third-quarter earnings are expected to increase 6.2%, while revenues are expected to decline 1.2% in the third quarter. The capital-intensive utility stocks were impacted by the ongoing rise in interest rates.
Factors That Likely Impacted Performances
Domestic-focused companies operating in the sector have been concentrating on cost management and the implementation of energy-efficiency programs. New rates and customer additions are creating fresh demand and assisting the utilities. Investments in strengthening the infrastructure are allowing utilities to reduce outages and provide efficient services 24x7 to customers, leading to stable earnings.
Utilities have been focused on improving productivity and their cost structures through investments in digital technologies, integrating key systems and analyzing data to make proper decisions to improve overall operations. Utilities continue to invest smart capital that helps reduce operating and maintenance expenses and fuel costs. This, in turn, helps customers save money on their utility bills.
Utilities have been adding more renewable and clean energy sources to their production portfolios and cutting down the use of coal and other polluting sources in their generation portfolios. Weather in the third quarter was warm, which adversely impacted use per customer during the period.
Capital-intensive utilities need massive funds to upgrade, maintain and expand their infrastructure and operations. The performances of the utilities are likely to have been adversely impacted by an increase in interest rates from near-zero levels.
According to the Zacks model, a company needs the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
FirstEnergy Corporation’s FE third-quarter earnings are likely to have benefited from the expansion of transmission lines and strengthening of infrastructure, lowering the possibility of service interruption. Favorable weather conditions and lower bad debt expenses also contributed to its performance. (Read more: FirstEnergy to Report Q3 Earnings: What's in the Cards?)
Our proven model does not predict an earnings beat for FirstEnergy this time around. FE has an Earnings ESP of -1.62% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FirstEnergy Corporation Price and EPS Surprise
FirstEnergy Corporation price-eps-surprise | FirstEnergy Corporation Quote
PG&E Corporation’s PCG third-quarter performance was impacted by mixed weather patterns in its service territories. The tropical storm might have increased operating expenses in the quarter. Increases in demand and cost management are likely to have a positive impact on earnings. ( Read more: PG&E to Report Q3 Earnings: Here's What to Expect)
Our proven model does not conclusively predict an earnings beat for PG&E this time around. PCG has an Earnings ESP of -29.59% and a Zacks Rank #2 (Buy) at present.
Pacific Gas & Electric Co. Price and EPS Surprise
Pacific Gas & Electric Co. price-eps-surprise | Pacific Gas & Electric Co. Quote
CMS Energy Corporation’s CMS third-quarter earnings are expected to have been driven by improving commercial and industrial electricity demand, along with favorable rate hikes witnessed in the recent past. Weather is expected to have had a mixed impact during the quarter. Nevertheless, sales growth and favorable effects of CMS’ numerous operational cost reduction initiatives are likely to have boosted its overall earnings. ( Read more: What's in the Offing for CMS Energy in Q3 Earnings?)
Our proven model does not conclusively predict an earnings beat for CMS Energy this time around. CMS has an Earnings ESP of -3.12% and a Zacks Rank #3 at present.
CMS Energy Corporation Price and EPS Surprise
CMS Energy Corporation price-eps-surprise | CMS Energy Corporation Quote
Xcel Energy’s XEL third-quarter earnings are expected to have witnessed a rise in sales contribution from Electric Commercial & Industrial customers. The company’s third-quarter earnings are likely to have benefited from the new electric and natural gas rates that were implemented during the quarter. (Read more: Xcel Energy to Report Q3 Earnings: What's in the Cards?)
Our proven model does not predict an earnings beat for Xcel Energy this time around. XEL has an Earnings ESP of -2.14% and a Zacks Rank #2 at present.
Xcel Energy Inc. Price and EPS Surprise
Xcel Energy Inc. price-eps-surprise | Xcel Energy Inc. Quote
CenterPoint Energy’s CNP third-quarter earnings are expected to have been driven by above-normal warm temperature patterns for most of the third quarter, with record-breaking heat during September. Such a weather pattern is expected to have boosted electricity demand for cooling purposes. Moreover, favorable rate hikes, along with customer growth observed in the prior quarters, are likely to have boosted the company’s revenues. ( Read more: CenterPoint Energy to Post Q3 Earnings: What's in Store?)
Our proven model does not predict an earnings beat for CenterPoint Energy this time around. CNP has an Earnings ESP of -0.67% and a Zacks Rank #2 at present.
CenterPoint Energy, Inc. Price and EPS Surprise
CenterPoint Energy, Inc. price-eps-surprise | CenterPoint Energy, Inc. Quote
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Xcel Energy Inc. (XEL) : Free Stock Analysis Report
FirstEnergy Corporation (FE) : Free Stock Analysis Report
Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report
CMS Energy Corporation (CMS) : Free Stock Analysis Report
CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
