Entergy Corporation ETR will release second-quarter 2018 results on Aug 1, before the opening bell.
Last quarter, the company delivered a negative earnings surprise of 11.45%. However, Entergy surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with a positive average beat of 59%.
Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that Entergy is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for
this to happen.
Earnings ESP: Entergy has an Earnings ESP of +0.66%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Entergy sports a Zacks Rank #3, which along with a positive Earnings ESP, increases the possibility of an earnings beat.
Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Entergy Corporation Price and EPS Surprise
Entergy Corporation Price and EPS Surprise | Entergy Corporation Quote
Factors at Play
In the second quarter, while most of the company's service territories witnessed above normal temperatures, parts of Texas suffered from power outages caused by storms and heavy rainfall. Thus, temperature may not act as a favorable factor for Entergy's revenues in this quarter.
Currently, the Zacks Consensus Estimate of $2.55 billion for Entergy’s second-quarter sales reflects a year-over-year decline of 2.5%.
Entergy has been lately experiencing higher non-fuel Operations and Management (O&M), owing to increasing nuclear expenses including nuclear payroll. The company expects to continue to incur similar increasing nuclear expenses over the near-term, in relation to its strategic plan like continuing operation of the Palisades plant, through 2022.
Inevitably, such rising costs are expected to weigh heavily on its results in the to-be- reported quarter. Considering this, the Zacks Consensus Estimate for Entergy’s second-quarter earnings of $1.26 per share reflects an annual decline of 59.5%.
On a bright note, the company expects macroeconomic factors to boost industrial growth in its service territories, which, in turn, should improve demand for electricity. We may expect the upcoming results to duly reflect these developments.
Other Stocks That Warrant a Look
Here are a few operators in the Utility space that you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:
Alliant Energy LNT has an Earnings ESP of +1.10% and a Zacks Rank #2. The company is scheduled to report second-quarter results on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CenterPoint Energy CNP has an Earnings ESP of +0.93% and a Zacks Rank #2. The company is scheduled to report second-quarter results on Aug 3.
The AES Corp. AES has an Earnings ESP of +3.01% and a Zacks Rank #3. The company is scheduled to report second-quarter results on Aug 3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment