Pinnacle West (PNW) to Post Q2 Earnings: What's in Store?

Pinnacle West Capital Corporation PNW is scheduled to release second-quarter 2020 results on Aug 6, before the opening bell. The company delivered an earnings surprise of 68.75% in the last reported quarter.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

The coronavirus-triggered stay-at-home directives increased the residential load and marginally offset the demand decline from the Commercial & Industrial (C&I) group. However, the imposed lockdown did have a negative bearing on the early part of the second quarter.  On the flip side, as the shutdown eased, the demand woes from the C&I group in the second half was completely offset by higher residential load. This demand fluctuation might reflect on the upcoming quarterly results. Cost-management initiatives undertaken by the company are also expected to have benefited the company in the June quarter.

Also, the company implemented a crisis management plan and made several efforts to support its customers during the pandemic. While its efforts are likely to have aided its earnings, payment flexibility might have hurt its cash balance. 

Q2 Expectations

The Zacks Consensus Estimate for second-quarter sales is pegged at $902 million, which indicates a rise of 3.74% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for second-quarter earnings per share stands at $1.41, which suggests a 10.16% hike from the year-ago quarter's reported figure.

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Pinnacle West this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Pinnacle West Capital Corporation Price and EPS Surprise

Pinnacle West Capital Corporation Price and EPS Surprise

Pinnacle West Capital Corporation price-eps-surprise | Pinnacle West Capital Corporation Quote

Earnings ESP: Pinnacle West has an Earnings ESP of +5.07%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Pinnacle West carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Investors can consider some other players worth considering from the same sector, which according to our model, also have the right combination of elements to beat on earnings this reporting cycle.

WEC Energy Group, Inc. WEC is set to release second-quarter earnings on Aug 4. It has an Earnings ESP of +0.96% and a Zacks Rank #2, presently.

American Water Works Company, Inc. AWK is set to release second-quarter earnings on Aug 5. It has an Earnings ESP of +1.18% and a Zacks Rank of 2, currently.

CenterPoint Energy, Inc. CNP is expected to release second-quarter numbers on Aug 6. It has an Earnings ESP of +7.87% and a Zacks Rank of 3 at present.

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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.

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