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Pinnacle West (PNW): Will it Post an Earnings Beat in Q4?

We expect Pinnacle West Capital CorporationPNW to beat estimates when it reports fourth-quarter 2016 results on Feb 24, before market open.

Last quarter, the company posted a negative earnings surprise of 2.49%, with a four-quarter average of a negative 9.99%. Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Pinnacle West is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: The Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +2.04%. This is because the Most Accurate Estimate is pegged at 50 cents, while the Zacks Consensus Estimate stands at 49 cents. This is a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Pinnacle West Capital Corporation Price and EPS Surprise

Pinnacle West Capital Corporation Price and EPS Surprise | Pinnacle West Capital Corporation Quote

Zacks Rank: Pinnacle West has a Zacks Rank #2 (Buy). Note that stocks with Zacks Ranks #1 (Strong Buy), 2 and 3 (Hold) have a significantly higher chance of beating earnings. Stocks with Zacks rank #4 or #5 (Sell rated), on the other hand, should never be considered going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

The combination of Pinnacle West's favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat this season.

What's Driving the Better-than-Expected Results?

The state of Arizona is witnessing a gradual economic recovery fueled by the rapidly developing Phoenix Metropolitan Area. Above-average job growth in construction, financial services and wholesale trade sectors will boost electricity sales on the back of higher demand.

On the flip side, above-average temperatures in the fourth quarter in its service territories are expected to hit the top line as lower heating requirements is likely to dampen electricity sales.

Stocks to Consider

Here are a few stocks in the utility space worth considering as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Spark Energy, Inc. SPKE has an Earnings ESP of +14.43% and a Zacks Rank #1. It is expected to report earnings on March 9.You can see the complete list of today's Zacks #1 Rank stocks here .

El Paso Electric Company EE has an Earnings ESP of +20% and a Zacks Rank #3. It is scheduled to release its quarterly numbers on Feb 23.

The Southern Company SO is slated to report earnings on Feb 22. It is has an Earnings ESP of +6.45% and a Zacks Rank #3.

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Pinnacle West Capital Corporation (PNW): Free Stock Analysis Report

Southern Company (The) (SO): Free Stock Analysis Report

El Paso Electric Company (EE): Free Stock Analysis Report

Spark Energy, Inc. (SPKE): 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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