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Sempra Energy (SRE) to Post Q2 Earnings: What's in the Offing?

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Sempra Energy (SRE - Free Report) is scheduled to release its second-quarter 2024 results on Aug 6 before market open. The company delivered a negative earnings surprise of 0.74% in the last reported quarter.

However, the company holds a four-quarter average earnings surprise of 3.87%.  Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors at Play

In the second quarter, the majority of SRE’s service territories experienced warmer-than-normal temperature patterns accompanied by drought conditions. Such above-average weather is likely to have boosted electricity demand from SRE’s customers for cooling purposes in the summer, which must have bolstered its overall top-line performance.

Sempra Energy Price and EPS Surprise

Sempra Energy Price and EPS Surprise

Sempra Energy price-eps-surprise | Sempra Energy Quote

However, adverse weather events, including severe storms and a few tornadoes, affected some parts of SRE’s service areas, which might have resulted in an outage for some of its customers during the second quarter. This may have some negative impact on its revenues.

Nevertheless, strong rate-based growth witnessed in the previous quarters is likely to have benefited Sempra’s second-quarter revenues.

From the cost perspective, the aforementioned adverse weather events might have caused infrastructural damage for Sempra Energy, thereby increasing the company’s operation and maintenance expenses to repair the damage. This, along with higher interest expenses, is likely to have negatively impacted the company’s bottom-line performance in the to-be-reported quarter.

However, solid sales expectations and favorable returns from earlier investments can be projected to have bolstered SRE’s overall earnings growth in the second quarter.

Q2 Expectations

The Zacks Consensus Estimate for SRE’s second-quarter sales stands at $3.52 billion, which suggests an increase of 5.6% from the year-ago reported number.

The Zacks Consensus Estimate for Sempra Energy’s second-quarter earnings is pegged at 98 cents per share, which implies a rise of 4.3% from the second-quarter 2023 reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for SRE this time. 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, which is not the case here, as you will see below.

Earnings ESP: SRE has an Earnings ESP of -5.80%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Sempra Energy carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

A Stock to Consider

Below, we have mentioned the following player from the same industry that has the right combination of elements to beat on earnings in the upcoming release.

Algonquin Power & Utilities (AQN - Free Report) is slated to report its second-quarter 2024 results on Aug 9 before market open. It has an Earnings ESP of +9.09% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for AQN’s second-quarter earnings stands at 8 cents per share, implying no change from the prior-year quarter’s reported actuals. The Zacks Consensus Estimate for AQN’s second-quarter sales is pegged at $625 million.

Recent Utility Releases

Edison International (EIX - Free Report) reported second-quarter 2024 adjusted earnings of $1.23 per share, which increased 21.8% from $1.01 in the year-ago quarter. The Zacks Consensus Estimate was pegged at $1.05.

Edison International's second-quarter operating revenues totaled $4.34 billion, which beat the Zacks Consensus Estimate of $4.03 billion by 7.5%. The top line also increased 9.4% from the year-ago quarter’s figure of $3.96 billion.

PG&E Corporation (PCG - Free Report) reported a second-quarter 2024 adjusted EPS of 31 cents, which surpassed the Zacks Consensus Estimate of 30 cents by 3.3%. The bottom line also improved 34.8% from the year-ago quarter’s reported figure.

PCG reported total second-quarter revenues of $5.99 billion, up 13.2% from $5.29 billion registered in the year-ago period. Operating revenues also surpassed the Zacks Consensus Estimate of $5.83 billion by 2.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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