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What's in the Offing for FirstEnergy's (FE) Q3 Earnings?

FirstEnergy Corporation FE is scheduled to release third-quarter 2020 results on Nov 2, before the market opens. The company has a trailing four-quarter earnings surprise of 6.37%, on average.

Let’s focus on the factors that might have impacted its September-quarter performance.

Factors to Consider

Amid the pandemic and lockdown restrictions, demand from FirstEnergy’s residential customers grew significantly. The same accounts for 65% of the utility’s distribution revenues, which is likely to have continued boosting the company’s third-quarter performance. Also, with easing lockdown, demand from the commercial and industrial group is expected to have improved, though not reaching its pre-pandemic levels.

However, many regions during the quarter witnessed power cuts and disruptions due to tropical storms as well as increasing operating expenses for the utility. This, in turn, might have negatively impacted its upcoming results.

Q3 Expectations

The Zacks Consensus Estimate for third-quarter 2020 earnings per share is pegged at 80 cents, which indicates 5.26% growth from the year-ago period’s reported figure. The Zacks Consensus Estimate for third-quarter sales stands at $2.91 billion, suggesting a decline of 1.95% from the year-ago period’s reported number.

The company expects third-quarter operating earnings in the range of 73-83 cents per share.

What Our Quantitative Model Predicts

FirstEnergy Corporation Price and EPS Surprise

FirstEnergy Corporation Price and EPS Surprise

FirstEnergy Corporation price-eps-surprise | FirstEnergy Corporation Quote

Our proven model does not predict an earnings beat for FirstEnergy 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: FirstEnergy has an Earnings ESP of-0.94%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, FirstEnergy carries a Zacks Rank #3.

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to beat on earnings beat in the to-be-reported quarter.

CMS Energy CMS is set to release third-quarter 2020 results on Oct 29. It has an Earnings ESP of +0.15% and is Zacks #3 Ranked, presently.

Southern Company SO is set to release third-quarter 2020 results on Oct 29. It has an Earnings ESP of +0.54% and is a #3 Ranked player at present.

SJW Group SJW is set to release third-quarter 2020 results on Nov 4. It has an Earnings ESP of +2.15% 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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