Utility Stock Q3 Earnings Roster for Nov 5: DUK, D & More

A handful of stocks from the

Utilities

sector have reported Q3 results so far, with the majority of them recording year-over-year earnings growth. Unfortunately, this time the regulated Utilities sector is one among 14 of the total 16 Zacks sectors projected to report year-over-year earnings decline.

Notably, total Q3 earnings of Utility stocks are expected to drop 1.4% year over year on 2% lower revenues. For more details on quarterly releases, you can go through our latest

Earnings Outlook

.

Factors Likely to Influence Q3 Results

Courtesy of the prolonged impacts of the coronavirus pandemic, reduced commercial and industrial activities are expected to have lowered demand in the Utilities sector during the third quarter. However, Utility companies must have witnessed increased demand from the residential group due to stay-at-home directives in the wake of the pandemic, which, in turn is expected to have offset the aforementioned reduced demand to some extent. Per data from the U.S. Energy Information Administration (EIA), revenues from the sale of electricity to the nation’s customers rose 1.9% year over year in July, while it declined 1.9% in August.  Such data further validates the reduced revenue generation capacity posed by utility providers during the third quarter.

Moreover, for major parts of the third quarter, solid storm activities including Hurricane Laura ravaged the coastal parts of the United States, followed by flash floods. No doubt such tropical storms damaged utility infrastructure, thereby pushing up quarterly costs for utility providers in the storm-affected regions. This in turn must have dragged down the sector’s overall earnings that should get reflected in third-quarter results.

Nevertheless, the nation’s near-zero level interest rate has offered a breather for utilities, thereby offering them abundant opportunity to invest in their infrastructural development. Such investments must have allowed them to restore services quickly even after getting impacted by an extremely active Atlantic hurricane season in 2020, per Colorado State University. This, along with rampant cost-cutting initiatives adopted by major utilities, in the wake of the pandemic, is likely to have prevented the sector from incurring huge losses in the third quarter.

Utilities Earnings in Focus

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

Duke Energy Corporation

’s

DUK

four-quarter average earnings surprise is 1.85%. Warmer-than-normal temperature influenced the company’s service territories during the third quarter, which is expected to have boosted the utility’s revenue performance. However, a handful of tropical storms are expected to have pushed up its storm restoration expenses, thereby weighing on earnings (read more:

Duke Energy to Report Q3 Earnings: What’s in Store?

)

Our proven model does not conclusively predict 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. This is not the case here.

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our

Earnings ESP Filter

.

Dominion Energy

’s

D

four-quarter average earnings surprise is 0.94%. With more people preferring to stay at home to prevent the spread of coronavirus, increased residential electricity demand is likely to have boosted the company’s third-quarter revenues. However, higher share count might have offset these positives to some extent.

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


the complete list of today’s Zacks #1 Rank stocks here

(Read more:

What’s in the Cards for Dominion Energy’s Q3 Earnings?

).

Consolidated Edison

’s

ED

four-quarter average earnings surprise is 2.64%. The company’s service territories suffered a series of tropical storms during the third quarter, which might have pushed up its expenses, thereby hurting quarterly bottom-line performance. However, warmer-than-normal temperature is expected to have contributed to its revenue growth.

The company has an Earnings ESP of -1.20% and carries a Zacks Rank #3 (read more:

What’s in Store for Consolidated Edison in Q3 Earnings?

).

PPL Corporation’

s

PPL

four-quarter average negative earnings surprise is 0.30%. With economic recovery, demand from the company’s commercial and industrial (C&I) customers group is likely to have improved in the third quarter, thereby aiding its quarterly results. PPL Corp. hedged nearly 95% of its foreign earnings to reduce the impact of adversely fluctuating currency prices, which is expected to have benefited earnings in third quarter.

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (read more:

PPL Corp to Report Q3 Earnings: What’s in the Cards?

).

CenterPoint Energy

’s

CNP

four-quarter average earnings surprise is 17.48%. Weather does not seem to have contributed much to the company’s revenues in the third quarter. A notable number of storms and tornadoes affected the company’s service territories that might have pushed up its expenses, which in turn can be expected to have hurt its earnings.

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (read more:

What’s in Store for CenterPoint Energy’s Q3 Earnings?

).

NRG Energy

’s

NRG

four-quarter average negative earnings surprise is 15.27%. A gradual improvement in demand from the Commercial and Industrial (C&I) group is expected to have benefited its quarterly performance. Lower outstanding shares must have favorably impacted earnings in the third quarter.

The company has an Earnings ESP of 0.00% and carries a Zacks Rank #3 (read more:

What’s in the Cards for NRG Energy’s Q3 Earnings?

).

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