The Zacks Utilities sector is off to a solid start to the fourth-quarter earnings season. So far, only 17.9% of the utilities have reported fourth-quarter results, registering 3.1% earnings growth on the back of a 13.9% revenue improvement.

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, adding more renewable assets to their generation portfolio, 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 aiding domestic-focused capital-intensive companies to get funds at low costs to carry on with infrastructure strengthening work.

Per the National Oceanic and Atmospheric Administration release, the 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.

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 have been creating fresh demand for utility services. The increasing customer base of the utilities is expected to have boosted their fourth-quarter performance.

Per the current Earnings Trends report, the utility sector’s fourth-quarter earnings are expected to decline 2.1%, while revenues are estimated to improve 10.3%. Let’s take a sneak peek into how the following utility stocks are poised prior to their fourth-quarter earnings on Feb 17.

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.

Eversource Energy’s (ES Quick QuoteES - Free Report) fourth-quarter earnings are likely to have benefited from higher contributions from transmission and distribution businesses due to systematic investments in transmission and distribution facilities. Contribution from the water distribution business is likely to have been lower in the fourth quarter, offsetting the positives. (Read more: Eversource Energy to Post Q4 Earnings: What's in Store?)

Our proven model predicts an earnings beat for Eversource Energy this time around. It has an Earnings ESP of +0.58% and a Zacks Rank of 3.

Consolidated Edison’s (ED Quick QuoteED - Free Report) fourth-quarter earnings are likely to have been adversely impacted by warmer-than-normal temperatures in its service territories, while positive outcomes from timely rate revisions can be projected to have aided revenues. (Read more: What's in Store for Consolidated Edison in Q4 Earnings?)

Our proven model predicts an earnings beat for Consolidated Edison this time around. It has an Earnings ESP of +2.26% and a Zacks Rank of 3.

IDACORP Inc.’s (IDA Quick QuoteIDA - Free Report) fourth-quarter earnings are expected to have benefited from an increase in the commercial and industrial customer base due to its ability to provide affordable electricity in the Idaho Power service area. Improvement in economic conditions and a drop in the unemployment rate in its service territories are likely to have generated fresh demand for IDA and provided ample support to fourth-quarter performance. (Read More: IDACORP to Post Q4 Earnings: What's in the Offing?)

Our proven model does not conclusively predict an earnings beat for IDACORP this time around. It has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Alliant Energy Corporation’s (LNT Quick QuoteLNT - Free Report) fourth-quarter earnings are expected to have benefited from the ongoing economic development and the rising demand from an expanding customer base. Alliant Energy’s fourth-quarter earnings are expected to have gained from the increasing rate base.

Our proven model does not predicts an earnings beat for Alliant Energy this time around. It has an Earnings ESP of 0.00% and a Zacks Rank of 3.

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