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Edison International (EIX) Q4 Earnings: A Beat in the Cards?

Edison International EIX is scheduled to report fourth-quarter 2017 earnings results on Feb 22, after the closing bell.

Last quarter, the company delivered an earnings surprise of 7.52%. It has surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with an average surprise of 9.08%.

Let’s see how things are shaping up at the company prior to this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Edison International is likely to beat earnings this quarter. Notably, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Edison International possesses both these attributes, as mentioned below:

Zacks ESP: The company has an Earnings ESP of +1.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3, which along with a positive Earnings ESP increases the chance of surprise prediction.

Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors at Play

Multiple wind-driven wildfires that ravaged through parts of California in December 2017, affected customers and electric service across the service territory of Southern California Edison, a subsidiary of Edison International. This in turn is likely to have an adverse impact on the fourth-quarter results.

In line with this, the Zacks Consensus Estimate for Edison International’s fourth-quarter earnings reflects 7.9% decline year over year, on 0.2% lower revenues worth $2.88 billion.

On a bright note, the company hiked quarterly dividend rate by 11.5%, for shareholders of record at the close of business on Dec 29, 2017. This represents the strong cash generation capacity that Edison International boasts. We anticipate its soon-to-be-reported quarter’s result to duly reflect the company’s efficiency in terms of reporting a stable cash inflow through operating activities.

Other Stocks that Warrant a Look

Here are a few other utility stocks which have the right combination of elements to post an earnings beat this quarter:

Public Service Enterprise Group PEG will report fourth-quarter results on Feb 23. The company has an Earnings ESP of +1.92% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pinnacle West Capital PNW will report fourth-quarter results on Feb 23. The company has an Earnings ESP of +12.20% and a Zacks Rank #3.

Eversource Energy ES will report fourth-quarter results on Feb 22. The company has an Earnings ESP of +0.66% and a Zacks Rank #3.

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Pinnacle West Capital Corporation (PNW): Free Stock Analysis Report
Edison International (EIX): Free Stock Analysis Report
Public Service Enterprise Group Incorporated (PEG): Free Stock Analysis Report
Eversource Energy (ES): Free Stock Analysis Report
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