What Awaits Public Service Enterprise (PEG) in Q3 Earnings?

Public Service Enterprise Group Inc. PEG is scheduled to release third-quarter 2020 results on Oct 30, before the opening bell.

The company delivered an earnings surprise of 33.90% in the last reported quarter. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and came in line with the same once, the average negative surprise being 10.07%.

Let’s see how things have shaped up prior to the announcement.

Factors to Consider

During the July-September 2020 quarter, majority of Public Service Enterprise’s service territory areas experienced warmer-than-normal temperature, which must have boosted electricity demand for cooling purposes. This is expected to have bolstered the company’s revenue generation in the soon-to-be-reported quarter.

Public Service Enterprise Group Incorporated Price and EPS Surprise

Public Service Enterprise Group Incorporated Price and EPS Surprise

Public Service Enterprise Group Incorporated price-eps-surprise | Public Service Enterprise Group Incorporated Quote

Moreover, revenues from ongoing capital investment programs in transmission and distribution may also have contributed to the top line of the company.

The Zacks Consensus Estimate for Public Service Enterprise’s third-quarter revenues is pegged at $2.52 billion, indicating an improvement of 9.6% from the year-ago quarter’s reported figure.

A series of tropical storms, including Hurricane Isaias affected the company’s service territories during the third quarter, resulted in widespread damage and power outages. This must have pushed up storm restoration costs for the company, which in turn might have weighed on its earnings. Moreover, unfavorable gas related bad debt expense is projected to have impacted its bottom line.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 95 cents per share, which suggests 3.1% decrease from the year-ago quarter reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Public Service Enterprise 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.  But that is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Public Service Enterprise carries a Zacks Rank #3.

Stocks to Consider

Here are some players from the Utilities sector that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Southern Company SO is set to release third-quarter earnings on Oct 29. It has an Earnings ESP of +0.54% and a Zacks Rank #3, presently.

Pinnacle West Capital PNW is set to release third-quarter earnings on Oct 30. It has an Earnings ESP of +0.98% and a Zacks Rank #3, currently.

A Recent Utility Release

American Electric Power AEP reported third-quarter 2020 adjusted earnings per share of $1.47, which beat the Zacks Consensus Estimate of $1.46 by 0.7%.

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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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