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Look at Gas Utility Stocks Earnings on Aug 2: MDU, NJR, OKE

We have crossed the half-way mark of second-quarter earnings releases with 317 S&P 500 members having already announced their results as of Jun 29, with earnings declining 3.3% on a 0.9% drop in revenues from the same period last year. As for the beat ratios, 72.9% of the companies have come ahead of earnings estimates and 53.6% have surpassed revenue expectations.

The picture that has emerged shows clearly that we are into another quarter of an earnings decline for the S&P 500 index. Earnings growth is projected to be in negative territory for the fifth straight quarter.

It is going to be another busy week ahead with 1,090 companies scheduled to report second-quarter earnings, including 116 S&P 500 members.

Eight out of the 16 sectors in the Zacks coverage universe are expected to witness an earnings decline. Overall, earnings are expected to be down 3.4% from the same period last year on a 0.4% decline in revenues. The largest drop will come not unsurprisingly from the Energy sector where earnings are expected to plunge 84% from the same period last year on a 26% decline in revenues.

However, among the outperformers, we have the Utility sector among the top this season. Utilities are expected to grow second-quarter earnings by 20.4% supported by a 5.2% top-line improvement (read more in our weekly Earnings Preview report).

For gas utilities, the clean burning nature of natural gas has led to a rise in demand in electric generation. Electric utilities are eschewing coal in favor of natural gas and other alternate sources for producing power.

The U.S. Energy Information Administration (EIA) forecasts U.S. total natural gas consumption to average 76.5 billion cubic feet per day (Bcf/d) in 2016 and 77.7 Bcf/d in 2017, compared with 75.3 Bcf/d in 2015. For 2016, the projected rise in total natural gas consumption is mainly attributed to increasing usage in the electric power sector.

Here, let us focus on a few gas utilities reporting on Aug 2.

ONEOK Inc.OKE , a Zacks Rank#2 (Buy) stock, reported a negative earnings surprise in the previous quarter. ONEOK Inc.'s Earnings ESP which represents the difference between the Most Accurate estimate of 41 cents and the Zacks Consensus Estimate of 41 cents is 0.00% (read more: ONEOK Q2 Earnings: What's in Store for the Stock? )

ONEOK INC Price and EPS Surprise

ONEOK INC Price and EPS Surprise | ONEOK INC Quote

MDU Resources Group Inc . MDU , a Zacks Rank #3 (Hold) stock, is a provider of value-added natural resource products and related services that are essential to energy and transportation infrastructure. The company delivered a positive earnings surprise of 30.77% in the previous quarter.

MDU Resources Group has an Earnings ESP of +5.00%. Our proven model shows that the company is likely to beat estimates this quarter. That is because the stock has both a positive Earnings ESP and a Zacks Rank #3.

MDU RESOURCES Price and EPS Surprise

MDU RESOURCES Price and EPS Surprise | MDU RESOURCES Quote

New Jersey Resources Corp . NJR , a Zacks Rank #2 stock, is a supplier of natural gas to residential and commercial customers. The company also owns and operates distributed power projects in some states. The company delivered a negative earnings surprise of 1.09% in the previous quarter.

New Jersey Resources has an Earnings ESP of 0.00%. Though a Zacks Rank #2 increases the possibility of an earnings beat, its 0.00% ESP makes an earnings beat uncertain this season.

NJ RESOURCES Price and EPS Surprise

NJ RESOURCES Price and EPS Surprise | NJ RESOURCES Quote

Northwest Natural Gas CompanyNWN , a Zacks Rank #3 stock, stores and distributes natural gas in the U.S. The company delivered a positive earnings surprise of 13.82% in the previous quarter.

Northwest Natural Gas Company has an Earnings ESP of 0.00%, which makes an earnings beat uncertain this season, despite its Zacks Rank #3.

NORTHWEST NAT G Price and EPS Surprise

NORTHWEST NAT G Price and EPS Surprise | NORTHWEST NAT G Quote

Stay tuned! Check later for our full write-up on earnings releases of these stocks.

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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

ONEOK INC (OKE): Free Stock Analysis Report

NJ RESOURCES (NJR): Free Stock Analysis Report

NORTHWEST NAT G (NWN): Free Stock Analysis Report

MDU RESOURCES (MDU): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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