What's in the Cards for Sempra (SRE) This Earnings Season?
Sempra Energy SRE is slated to report fourth-quarter and full-year 2023 results on Feb 27, before the opening bell.
The company delivered an earnings surprise of 6.93% in the last reported quarter. SRE has a trailing four-quarter average earnings surprise of 9.03%.
Factors to Note
Sempra’s service territories witnessed warmer-than-normal temperatures during the October-December period. Such a weather pattern is expected to have boosted the electricity demand for cooling purposes in this fall. This is likely to have contributed favorably to SRE’s fourth-quarter revenues.
Favorable base rates observed in prior quarters, customer growth and cost-saving initiatives are likely to have benefited Sempra’s fourth-quarter earnings. Moreover, growth in multiple areas of Oncor service territory and the premier energy-producing region, the Permian Basin, might have also contributed positively.
However, higher interest expenses, transportation tariff and lower income tax benefits are likely to have negatively impacted the company’s bottom line in the to-be-reported quarter.
Q4 Expectations
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $4.03 billion. This indicates a 16.7% increase from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.13 per share, indicating a 4.2% decline from the prior-year reported figure.
Sempra Energy Price and EPS Surprise
Sempra Energy price-eps-surprise | Sempra Energy Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Sempra this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: The company’s Earnings ESP is +0.29%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: SRE carries a Zacks Rank #3 at present.
Other Stocks to Consider
Here are some other Utility players that, too, have the right combination of elements to come up with an earnings beat this reporting cycle.
AES AES has an Earnings ESP of +0.36% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AES’ fourth-quarter sales is pegged at $3.10 billion, indicating growth of 1.3% from that recorded in the prior-year quarter. The consensus mark for earnings is pinned at 69 cents per share, implying an improvement of 40.8% from the prior-year quarter's level.
Consolidated Water CWCO has an Earnings ESP of +4.44% and a Zacks Rank #2 at present. The stock delivered an average earnings surprise of 61.56% in the last four quarters.
The Zacks Consensus Estimate for CWCO’s fourth-quarter sales is pegged at $45 million and that of earnings is pinned at 45 cents per share. The company has a long-term (three to five years) earnings growth rate of 8%.
Recent Utility Release
FirstEnergy FE reported fourth-quarter 2023 operating earnings of 62 cents per share, which surpassed the Zacks Consensus Estimate of 60 cents by 3.3%. The bottom line also increased 24% from the year-ago quarter’s reported figure of 50 cents.
Operating revenues of $3.15 billion missed the Zacks Consensus Estimate of $3.29 billion by 4.2%. The top line also declined 0.9% from $3.18 billion recorded in the year-ago period.
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Sempra Energy (SRE) : Free Stock Analysis Report
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The AES Corporation (AES) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
