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Utility Stock Q2 Earnings Due on Aug 4: EXC, NI, ETR & More

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·4 min read
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The Zacks Utilities sector is off to a solid start to the second-quarter earnings season, with The Southern Company SO and Xcel Energy Inc. XEL beating estimates by 6.3% and 3.6%, respectively. For the quarter, the sector is expected to witness growth of 4.6% and 8.3% in earnings and revenues, respectively, per our latest Earnings Trends report.

Utilities have been benefiting from new electric rates, customer addition, cost management, implementation of energy efficiency programs, ongoing investments to improve resilience of the electric infrastructure against extreme weather conditions and their transition toward cost-effective alternate sources of fuel to produce electricity.

Utilities across the United States have been making the most of economic improvement, as the nation continues to recover from the pandemic impact. Rollout of vaccines and increasing medical knowledge to deal with the COVID-19 pandemic are gradually bringing life back to normal despite threat from the new variant of the virus. Improving economic activities increased demand from the commercial and industrial (C&I) group in the second quarter. Stable demand from the residential space has been supporting the utilities.

Even during the pandemic, utilities continued with their investments to strengthen transmission and distribution lines, expanded infrastructure, ensured proper maintenance of the existing infrastructure that aids in providing 24x7 services to customers as well as boosted earnings. The continuation of near-zero interest rates has been assisting capital-intensive companies to get funds at low costs to carry on with infrastructure strengthening work.

Per the U.S. Energy Information Administration (“EIA”), electricity consumption in the United States will increase 2.8% in 2021, after falling 3.9% in 2020, primarily due to gradual improvement in economic conditions. The utilities are likely to have benefited from an increase in the demand for utility services in the second quarter driven by a boost in C&I activities. Per EIA, in 2021, electricity demand from industrial and commercial customers is likely to improve 5.1% and 2.1%, respectively, from 2020 levels.

Let’s focus on a few utility companies that are scheduled to release second-quarter 2021 earnings on Aug 4.

Exelon Corporation EXC is slated to release quarterly results before the market opens. The company’s second-quarter results are expected to benefit from higher demand from customers and cost management. (Read more: What's in the Offing for Exelon This Earnings Season?)

Per the Zacks quantitative model, 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Our proven model predicts an earnings beat for Exelon this time around. It has an Earnings ESP of +6.16% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Exelon Corporation Price and EPS Surprise

Exelon Corporation Price and EPS Surprise
Exelon Corporation Price and EPS Surprise

Exelon Corporation price-eps-surprise | Exelon Corporation Quote

NiSource Inc. NI is slated to release quarterly results before the market opens. The company’s second-quarter results are expected to benefit from higher demand from customers and new gas rates coming into effect in its different units. (Read more: NiSource to Report Q2 Earnings: What's in the Offing?)

The company currently has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell).

NiSource, Inc Price and EPS Surprise

NiSource, Inc Price and EPS Surprise
NiSource, Inc Price and EPS Surprise

NiSource, Inc price-eps-surprise | NiSource, Inc Quote

ALLETE, Inc. ALE is slated to release quarterly results before the market opens. The company’s second-quarter results are expected to benefit from new rates implemented in its services territories, offset by higher expenses.

The company currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Allete, Inc. Price and EPS Surprise

Allete, Inc. Price and EPS Surprise
Allete, Inc. Price and EPS Surprise

Allete, Inc. price-eps-surprise | Allete, Inc. Quote

Entergy Corporation ETR is slated to release quarterly results before the market opens. Second-quarter results are likely to benefit from improvement in electricity usage. Yet, higher operating expenses to mitigate the impact of storms might have offset some of the positives. (Read more: What's in Store for Entergy This Earnings Season?)

The company currently has an Earnings ESP of -0.53% and a Zacks Rank of 3.

Entergy Corporation Price and EPS Surprise

Entergy Corporation Price and EPS Surprise
Entergy Corporation Price and EPS Surprise

Entergy Corporation price-eps-surprise | Entergy Corporation Quote


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Exelon Corporation (EXC) : Free Stock Analysis Report

Xcel Energy Inc. (XEL) : Free Stock Analysis Report

Southern Company The (SO) : Free Stock Analysis Report

NiSource, Inc (NI) : Free Stock Analysis Report

Entergy Corporation (ETR) : Free Stock Analysis Report

Allete, Inc. (ALE) : Free Stock Analysis Report

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