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Utility Stocks Q4 Earnings Roster for Feb 17: ES, NI and ALE
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Fourth-quarter earnings have so far been satisfactory for the S&P 500 members of the Utilities sector. At present, 333 S&P 500 members have reported results, out of which 17.9% belongs to Utility space. The companies that already have reported earnings in the Utilities space registered 4.6% growth in earnings. For the quarter as a whole, the sector is expected to witness a decline of 2.8% in earnings, with revenues down 0.1%, per our latest Earnings Trends report.
The estimated loss in earnings for the Utilities sector for the fourth quarter has narrowed compared with our earlier Earnings trends report. Utilities are benefiting from new rates, cost control, ongoing investments to strengthen the electric infrastructure and their transition toward cost-effective alternate source of fuel to produce electricity.
Factors to Consider
The outbreak of the pandemic during the first part of 2020 created challenges for Utilities as lockdown on all economic activities lowered demand from commercial and industrial (C&I) space. Increasing medical knowledge to effectively deal with COVID-19, and gradual reopening of economic activities increased demand for utility services from C&I space, with constant support from the residential group due to extended work from home.
The pandemic did not deter Utilities and it continued with its capital expenditure projects to fortify infrastructure. Also, the prevailing near zero interest rates offered great help as it kept capital servicing cost low and boosted margins of the sector.
Use of advanced technology and ongoing research & development work is lowering cost of producing from clean energy sources. The development of large battery storage projects is supplementing the development of utility scale project based on alternate sources of energy like wind and solar. A clear transition is evident in the utility space with old production units being replaced with more efficient natural gas and cleaner energy sources.
Let’s focus on few utility companies that are scheduled to release fourth-quarter 2020 earnings on Feb 17.
Eversource Energy (ES - Free Report) is slated to release results before the market opens. The utility reported a negative surprise of 0.98% in the last reported quarter. Eversource Energy’s fourth-quarter earnings are likely to have benefited from the inclusion of Eversource Gas Company of Massachusetts in the natural gas segment. The quarterly earnings might have gotten a boost from contribution from its offshore wind assets. (Read more: What's in Store for Eversource Energy's Q4 Earnings?)
Our proven model does not conclusively predict an earnings beat for Eversource Energy this time around. Eversource has an Earnings ESP of -1.75% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
ALLETE Inc. (ALE - Free Report) is scheduled to release earnings before the market opens. The company delivered a positive earnings surprise of 25.81% in the last reported quarter.
ALLETE currently has an Earnings ESP of 0.00% and a Zacks Rank of 2
Fourth-quarter earnings are likely to have been negatively impacted by lower sales from its commercial, other industrial and municipal customers.
NiSource, Inc. (NI - Free Report) is scheduled to release earnings before the market opens. The company delivered a positive earnings surprise of 109.46% in the last reported quarter.
NiSource currently has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell).
With the revival of economic activities, demand from NiSource’s C&I group is gradually returning to the pre-pandemic levels. Also, continuously improving demand from residential customers is likely to have prevailed in the December quarter. Further, the utility’s cost management and regulatory solutions are likely to have supported its financials.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Utility Stocks Q4 Earnings Roster for Feb 17: ES, NI and ALE
Fourth-quarter earnings have so far been satisfactory for the S&P 500 members of the Utilities sector. At present, 333 S&P 500 members have reported results, out of which 17.9% belongs to Utility space. The companies that already have reported earnings in the Utilities space registered 4.6% growth in earnings. For the quarter as a whole, the sector is expected to witness a decline of 2.8% in earnings, with revenues down 0.1%, per our latest Earnings Trends report.
The estimated loss in earnings for the Utilities sector for the fourth quarter has narrowed compared with our earlier Earnings trends report. Utilities are benefiting from new rates, cost control, ongoing investments to strengthen the electric infrastructure and their transition toward cost-effective alternate source of fuel to produce electricity.
Factors to Consider
The outbreak of the pandemic during the first part of 2020 created challenges for Utilities as lockdown on all economic activities lowered demand from commercial and industrial (C&I) space. Increasing medical knowledge to effectively deal with COVID-19, and gradual reopening of economic activities increased demand for utility services from C&I space, with constant support from the residential group due to extended work from home.
The pandemic did not deter Utilities and it continued with its capital expenditure projects to fortify infrastructure. Also, the prevailing near zero interest rates offered great help as it kept capital servicing cost low and boosted margins of the sector.
Use of advanced technology and ongoing research & development work is lowering cost of producing from clean energy sources. The development of large battery storage projects is supplementing the development of utility scale project based on alternate sources of energy like wind and solar. A clear transition is evident in the utility space with old production units being replaced with more efficient natural gas and cleaner energy sources.
Let’s focus on few utility companies that are scheduled to release fourth-quarter 2020 earnings on Feb 17.
Eversource Energy (ES - Free Report) is slated to release results before the market opens. The utility reported a negative surprise of 0.98% in the last reported quarter. Eversource Energy’s fourth-quarter earnings are likely to have benefited from the inclusion of Eversource Gas Company of Massachusetts in the natural gas segment. The quarterly earnings might have gotten a boost from contribution from its offshore wind assets. (Read more: What's in Store for Eversource Energy's Q4 Earnings?)
Per the Zacks quantitative model, 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 see the complete list of today’s Zacks #1 Rank stocks here.
Our proven model does not conclusively predict an earnings beat for Eversource Energy this time around. Eversource has an Earnings ESP of -1.75% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Eversource Energy Price and EPS Surprise
Eversource Energy price-eps-surprise | Eversource Energy Quote
ALLETE Inc. (ALE - Free Report) is scheduled to release earnings before the market opens. The company delivered a positive earnings surprise of 25.81% in the last reported quarter.
ALLETE currently has an Earnings ESP of 0.00% and a Zacks Rank of 2
Fourth-quarter earnings are likely to have been negatively impacted by lower sales from its commercial, other industrial and municipal customers.
Allete, Inc. Price and EPS Surprise
Allete, Inc. price-eps-surprise | Allete, Inc. Quote
NiSource, Inc. (NI - Free Report) is scheduled to release earnings before the market opens. The company delivered a positive earnings surprise of 109.46% in the last reported quarter.
NiSource currently has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell).
With the revival of economic activities, demand from NiSource’s C&I group is gradually returning to the pre-pandemic levels. Also, continuously improving demand from residential customers is likely to have prevailed in the December quarter. Further, the utility’s cost management and regulatory solutions are likely to have supported its financials.
Moreover, the new gas rates that were effective in September and December 2020 are likely to have positively impacted earnings. (Read more: NiSource to Report Q4 Earnings: What's in the Offing?)
NiSource, Inc Price and EPS Surprise
NiSource, Inc price-eps-surprise | NiSource, Inc Quote
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>