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Utility Stock Q4 Earnings Due on Feb 10: FE, DUK, DTE & More

·5 min read

The Zacks Utilities sector is off to a solid start to the fourth-quarter earnings season, with NextEra Energy NEE and WEC Energy Group WEC beating estimates by 2.5% and 3.6%, respectively. So far, only 7.1% of the utilities have reported fourth-quarter results, registering 5.2% earnings growth on the back of 14.4% revenue growth.

Utilities have been benefiting from new electric rates, customer additions, cost management, implementation of energy efficiency programs, ongoing investments to improve the resilience of the electric infrastructure against extreme weather conditions and their transition toward cost-effective alternate sources of fuel to produce electricity. Utilities have been investing in transmission and distribution lines and making the system more resilient to withstand inclement weather conditions and provide 24X7 services to consumers.

The continuation of near-zero interest rates has been assisting domestic-focused capital-intensive companies to get funds at low costs to carry on with infrastructure strengthening work.

Despite the threat of the new variant of COVID-19, the overall improvement in economic conditions in the United States and the restart of commercial and industrial activities are creating fresh demand for utility services. The increasing customer base of the utilities is expected to have boosted their fourth-quarter performance.

Per the National Oceanic and Atmospheric Administration release, December contiguous U.S. temperature was 39.3 degrees F, 6.7 degrees above average, making it the warmest December on record. No doubt, warmer-than-normal weather conditions in December 2021 are likely to have adversely impacted the demand for utility services.

Per the current Earnings Trends report, the utility sector’s fourth-quarter earnings are expected to decline 2%, while revenues are estimated to improve 9.6%. Let’s take a sneak peek into how the following utility stocks are poised prior to their fourth-quarter earnings on Feb 10.

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 Corp.’s FE fourth-quarter earnings are likely to have gained from higher sales volume from the Commercial and Industrial group. Lower operating and maintenance expenses are also expected to have boosted its performance. Yet, the upcoming results are expected to be adversely impacted by the absence of Ohio decoupling. (Read more: FirstEnergy to Report Q4 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for FirstEnergy this time around. It has an Earnings ESP of +1.44% and a Zacks Rank of 4 (Sell).

FirstEnergy Corporation Price and EPS Surprise

FirstEnergy Corporation Price and EPS Surprise
FirstEnergy Corporation Price and EPS Surprise

FirstEnergy Corporation price-eps-surprise | FirstEnergy Corporation Quote

Duke Energy Corporation’s DUK fourth-quarter earnings are likely to have gained from higher sales volume from the Commercial and Industrial group. Further, the expanding customer base is likely to boost results. Cost-management initiatives are also expected to have boosted overall performance. Yet, inconsistent weather in its service territories might have had a moderate impact on the utility’s fourth-quarter top-line performance. (Read more: Duke Energy to Post Q4 Earnings: What's in Store?)

Our proven model does not conclusively predict an earnings beat for Duke Energy this time around. It has an Earnings ESP of -1.58% and a Zacks Rank of 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

DTE Energy Company DTE experienced inconsistent weather conditions during the quarter, which is likely to have had an adverse impact on demand. Nonetheless, a favorable tax reversal is expected to have boosted the bottom line. (Read more: DTE Energy to Report Q4 Earnings: What's in the Offing?)

Our proven model predicts an earnings beat for DTE Energy this time around. It has an Earnings ESP of +1.06% and a Zacks Rank of 3.

DTE Energy Company Price and EPS Surprise

DTE Energy Company Price and EPS Surprise
DTE Energy Company Price and EPS Surprise

DTE Energy Company price-eps-surprise | DTE Energy Company Quote

PG&E Corporation’s PCG fourth-quarter earnings are likely to reflect strong cost-reduction efforts and successful settlement agreements regarding cost recovery for wildfire mitigation. The overall impact of weather patterns is likely to have been mixed on the company’s fourth-quarter top line. (Read more: PG&E to Report Q4 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for PG&E Corp. this time around. It has an Earnings ESP of 0.00% and a Zacks Rank of 2.

Pacific Gas & Electric Co. Price and EPS Surprise

Pacific Gas & Electric Co. Price and EPS Surprise
Pacific Gas & Electric Co. Price and EPS Surprise

Pacific Gas & Electric Co. price-eps-surprise | Pacific Gas & Electric Co. Quote

MDU Resources Group’s MDU fourth-quarter earnings are likely to have benefited from strong demand from the increasing electric and natural gas customer volumes and acquisitions completed during the quarter. Yet, the upcoming results are likely to be adversely impacted by an increase in operating and maintenance expenses in the electric and natural gas distribution segment. (Read More: MDU Resources to Post Q4 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for MDU Resources this time around. It has an Earnings ESP of 0.00% and a Zacks Rank of 4.

MDU Resources Group, Inc. Price and EPS Surprise

MDU Resources Group, Inc. Price and EPS Surprise
MDU Resources Group, Inc. Price and EPS Surprise

MDU Resources Group, Inc. price-eps-surprise | MDU Resources Group, Inc. Quote

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

FirstEnergy Corporation (FE) : Free Stock Analysis Report

Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report

Duke Energy Corporation (DUK) : Free Stock Analysis Report

DTE Energy Company (DTE) : Free Stock Analysis Report

WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report

MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report

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Zacks Investment Research