What to Expect From These 5 Utility Stocks in Q2 Earnings?

Core Insights - The power sector is expected to benefit from ongoing investments aimed at enhancing electric infrastructure resilience against extreme weather and transitioning to more affordable renewable energy sources [1] Group 1: Earnings Predictions and Performance - The Zacks model indicates that a positive Earnings ESP and a Zacks Rank of 3 or better are essential for increasing the likelihood of an earnings beat [2] - Xcel Energy is predicted to achieve an earnings beat with an Earnings ESP of +3.48% and a Zacks Rank of 2 [7] - Entergy Corporation's service areas experienced above-normal temperatures, likely boosting electricity demand and revenues, despite some adverse weather impacts [18] Group 2: Weather Impact on Utilities - The second quarter saw warmer-than-normal weather across utility service territories, which is expected to positively influence top-line performance [6] - Severe weather events, including rain and hailstorms, are anticipated to have caused outages for Entergy's customers, negatively affecting its overall performance [3] Group 3: Sector Trends and Investments - The Zacks Utilities sector's second-quarter earnings are projected to increase by 9.1% year-over-year, driven by revenue growth of 1.1% and infrastructure enhancements for reliable service under extreme weather [10] - Utilities are committing to 100% clean energy and reducing coal usage, while investing in large battery storage units to ensure electricity supply during non-productive hours [9] - Continuous capital expenditures by utilities are aimed at reducing operating costs and improving efficiency through digital technology and energy efficiency programs [16] Group 4: Company-Specific Insights - Dominion Energy's second-quarter earnings are likely to benefit from regulated investments and higher sales volumes due to economic growth in Virginia and South Carolina [8] - Consolidated Edison is expected to see a positive impact on its second-quarter performance from warmer temperatures and strong rate-based growth [8] - Pinnacle West Capital's new Energy Management System is expected to enhance the integration of renewable energy and storage assets, although higher depreciation and taxes may offset some benefits [3]