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Utility Stock Q2 Earnings Lineup for Aug 5: DUK, ED & More

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·5 min read
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So far, majority of the S&P 500 members from the Utilities sector have come up with better-than-expected Q2 earnings number. Notably, the domestic-focused matured Utility sector is one among 12 of the total 16 Zacks sectors projected to report year-over-year earnings decline.

In particular, total Q2 earnings of Utility stocks are expected to improve 4.6% year over year on 8.3% higher revenues. For more details on quarterly releases, you can go through our latest Earnings Preview.

Factors Likely to Have Influenced Q2

Gradually improving economic activities across the nation are expected to have boosted overall Q2 results of Utility stocks in the United States. Decent rollout of vaccines has been playing the role of a major catalyst in boosting economic activities. Consequently, there has been an uptick in economic activities within the commercial and industrial space (C&I), which in turn must have boosted electricity demand in the second quarter. Stable demand from the residential space has already been supporting the utilities.

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. Electricity demand from industrial and commercial customers is likely to improve 5.1% and 2.1% in 2021, respectively, from 2020 levels. Such improved demand and consumption scenario is likely to have benefited utility stocks’ Q2 operational performance.

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

Utilities' Earnings in Focus

Let's take a look at some Utility stocks that are scheduled to report earnings on Aug 5.

Duke Energy’s DUK earnings surpassed the Zacks Consensus Estimate in the last four quarters, with the average earnings surprise being 2.73%. The company’s service territories experienced mixed weather patterns during the second quarter, which in turn is expected to have had a moderate impact on the utility’s quarterly top-line performance.

Benefits from earlier base rate increases in North Carolina, Florida, Indiana and Kentucky are expected to have aided the company’s Q2 performance. However, higher operating and maintenance expenses due to the significant COVID mitigation actions taken by the company might have hurt its quarterly earnings (read more: Duke Energy to Report Q2 Earnings: What's in Store?)

Our proven model predicts an earnings beat for Duke Energy this time around. 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 uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company has an Earnings ESP of +0.15% and carries a Zacks Rank #3.

Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation Price and EPS Surprise
Duke Energy Corporation Price and EPS Surprise

Duke Energy Corporation price-eps-surprise | Duke Energy Corporation Quote

Consolidated Edison ED came up with a four-quarter average earnings surprise of 4.61%. A more or less favorable weather pattern, in terms of electricity demand, prevailed in the company’s service territories, during the second quarter, which in turn must have contributed to its revenues.

Heavy rainfall along with flash flood might have caused damages in some of Consolidated Edison’s infrastructure in the soon-to-be-reported quarter, which might have pushed up its operating expenses, thereby hurting earnings growth (read more: Consolidated Edison to Post Q2 Earnings: What's in Store?).

The company has an Earnings ESP of +1.74% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc Price and EPS Surprise
Consolidated Edison Inc Price and EPS Surprise

Consolidated Edison Inc price-eps-surprise | Consolidated Edison Inc Quote

PPL Corporation PPL witnessed a negative earnings surprise of 17.6% in the trailing four quarters, on average. With the rollout of vaccines and reopening of the economy, demand from the commercial and industrial group is likely to have slightly improved in the second quarter.

The expected higher debt financing expenses are likely to have hurt earnings in the to-be-reported quarter (read more: PPL to Post Q2 Earnings: What's in the Cards?).

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #5 (Strong Sell).

PPL Corporation Price and EPS Surprise

PPL Corporation Price and EPS Surprise
PPL Corporation Price and EPS Surprise

PPL Corporation price-eps-surprise | PPL Corporation Quote

Ameren Corp. AEE came up with an earnings surprise of 6.85% in the trailing four quarters, on average. Its operational regions witnessed more or less average temperatures during most of the second quarter, which in turn is expected to have boosted its revenues.

A seasonal rate design change for 2021 in Ameren Missouri and absence of the impact of the 2024 FERC order are likely to have hurt its quarterly earnings (read more: Ameren Corp. to Report Q2 Earnings: What's in Store?).

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

Ameren Corporation Price and EPS Surprise

Ameren Corporation Price and EPS Surprise
Ameren Corporation Price and EPS Surprise

Ameren Corporation price-eps-surprise | Ameren Corporation Quote

AES Corp. AES came up with a four-quarter average earnings surprise of 1.59%. Increasing LNG sales in Central America and the Caribbean are expected to boost its Q2 results.

Factors like cost-saving initiatives, interest expense savings, reduction witnessed in overall energy costs and Med normalization to pre-COVID levels are expected to have benefited AES Corp.’s upcoming quarterly earnings (read more: AES Corp. to Report Q2 Earnings: What's in the Cards?).

The company has an Earnings ESP of +0.87% and carries a Zacks Rank #4 (Sell).

The AES Corporation Price and EPS Surprise

The AES Corporation Price and EPS Surprise
The AES Corporation Price and EPS Surprise

The AES Corporation price-eps-surprise | The AES Corporation Quote


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PPL Corporation (PPL) : Free Stock Analysis Report

Ameren Corporation (AEE) : Free Stock Analysis Report

Duke Energy Corporation (DUK) : Free Stock Analysis Report

Consolidated Edison Inc (ED) : Free Stock Analysis Report

The AES Corporation (AES) : Free Stock Analysis Report

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