We are nearing the tail end of the second-quarter earnings season with nearly 87% of the members in the S&P 500 Index scheduled to release earnings by the week ending Aug 5. The picture that has emerged so far shows clearly that we are into another season of an earnings decline for the S&P 500 index. Earnings growth is projected to be in negative territory for the fifth straight quarter.
Nearly 63% of S&P 500 members had already announced their results as of Jun 29. Earnings have declined 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.
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 from the Energy sector where earnings are expected to plunge 84% from the same period last year on a 26% decline in revenues (read more in our weekly Earnings Preview report).
Utilities Sector Price Index
Among the remaining eight sectors in our coverage, which are expected to witness earnings growth, Utility is going to feature among the top this season. Utilities are expected to grow second-quarter earnings by 20.4% supported by a 2.4% top-line improvement.
The capital intensive utilities have been benefiting from rock-bottom interest rates. Moreover, warmer-than-normal weather that prevailed in the U.S. during the second quarter should give a boost to sales.
Here, let us focus on a few utilities reporting on Aug 5.
The AES Corporation AES , a Zacks Rank #3 (Hold) stock, reported a negative earnings surprise of 31.58% in the previous quarter. The AES Corporation's Earnings ESP which represents the difference between the Most Accurate estimate of 20 cents and the Zacks Consensus Estimate of 18 cents is +11.11% (read more: AES Corp : Stock to Beat Q2 Earnings Estimates? ).
AES CORP Price and EPS Surprise
CenterPoint Energy Inc. CNP , a Zacks Rank #3 (Hold) stock, reported a positive earnings surprise of 16.13% in the previous quarter. The company's Earnings ESP is 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 20 cents (read more: CenterPoint Q2 Earnings: What's Ahead for the Stock? )
CENTERPOINT EGY Price and EPS Surprise
Ameren Corporation AEE , a Zacks Rank #4 (Sell) stock, reported a positive earnings surprise of 4.88% in the previous quarter. Ameren's Earnings ESP which represents the difference between the Most Accurate estimate of 52 cents and the Zacks Consensus Estimate of 53 cents is -1.89% (read more: Ameren Q2 Earnings: Disappointment in the Cards? ).
AMEREN CORP Price and EPS Surprise
Pattern Energy Group Inc. PEGI , a Zacks Rank #3 stock, operates as an independent power company that owns and operates power projects in the United States, Canada and Chile. The company reported a positive earnings surprise of 300.0% in the previous quarter.
Pattern Energy Group's Earnings ESP which represents the difference between the Most Accurate estimate of 2 cents and the break-even Zacks Consensus Estimate is 0.00%. Our proven model does not conclusively show that Pattern Energy Group is likely to beat estimates this quarter.
PATTERN ENERGY Price and EPS Surprise
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