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What's in Store for CenterPoint Energy (CNP) in Q2 Earnings?

Zacks Equity Research

CenterPoint Energy, Inc. CNP is set to report second-quarter 2020 results on Aug 6, before the opening bell.

In the last-reported quarter, the company delivered an earnings surprise of 11.11%. Moreover, it surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 18.07%.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

CenterPoint Energy's major service territories experienced warmer-than-normal spring temperatures throughout the second quarter of 2020. This is likely to have boosted its second-quarter revenues since warmer-than-normal temperature means more usage of heating appliances.

CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. Price and EPS Surprise
CenterPoint Energy, Inc. Price and EPS Surprise

CenterPoint Energy, Inc. price-eps-surprise | CenterPoint Energy, Inc. Quote

However, the company's service territories witnessed a notable number of storms and tornadoes in the second quarter, which may have resulted in increasing power outages and disruptions. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.11billion, suggesting a decline of 24.5% from the year-ago quarter’s reported figure.

Thanks to the coronavirus impact, the company has been witnessing reduced demand, particularly for natural gas distribution, commercial and industrial businesses. This is expected to have impacted CenterPoint Energy's earnings.

Currently the Zacks Consensus Estimate for second-quarter earnings is pegged at 22 cents per share, suggesting a 37.2% plunge from the prior-year quarter’s reported figure.

On Apr 9, CenterPoint completed the sale of its Infrastructure Services business for $670 million of cash. We expect the company’s balance sheet to reflect the sale proceeds.

Earnings Whispers

Our proven model predicts an earnings beat for CenterPoint 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 chances of an earnings beat.

Earnings ESP: The company’s Earnings ESP is +7.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CenterPoint Energy currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are some players from the Utilities sector that also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Pinnacle West Capital Corporation PNW is set to release second-quarter earnings on Aug 6. It has an Earnings ESP of +5.07% and a Zacks Rank #3, presently.

American Water Works Company, Inc. AWK is set to release second-quarter earnings on Aug 5. It has an Earnings ESP of +1.18% and a Zacks Rank of 3, currently.

Essential Utilities WTRG is set to release second-quarter 2020 numbers on Aug 5. It has an Earnings ESP of +7.75% and carries a Zacks Rank #3.

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CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
 
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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
 
Essential Utilities Inc. (WTRG) : Free Stock Analysis Report
 
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