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What's in Store for Entergy (ETR) This Earnings Season?

Entergy Corporation ETR will release fourth-quarter 2017 results on Feb 23, before the opening bell.

Last quarter, the company delivered a positive earnings surprise of 7.31%. Moreover, Entergy Corp. outperformed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 85.43%.

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

Factors at Play

Most of the company's service territories witnessed warmer-than-normal winters during the quarter under review. This has lowered demand for electricity in these regions, which in turn, is expected to weigh on the company’s fourth-quarter sales.

The Zacks Consensus Estimate for Entergy Corp.’s fourth-quarter sales of $2.33 billion marks a year-over-year decline of 12.2%.

In October 2017, the Louisiana Public Service Commission approved the recovery of nuclear dry fuel storage costs incurred by Entergy Corp. earlier. The move is expected to boost the company’s fourth-quarter earnings. Our consensus estimate for fourth-quarter earnings of 42 cents per share reflects an annual growth of 35.5%.

Moreover, during the fourth quarter, Entergy Corp. raised its quarterly dividend by 2.3% to 89 cents per share. This indicates improved cash inflow from operating activities for the company which we believe will drive its fourth-quarter results.

Earnings Whispers

Our proven model does not show that Entergy Corp. is likely to beat earnings this quarter. This is because 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. This is not the case here, as you will see below.

Zacks ESP: Entergy Corp. has an Earnings ESP of -2.06%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Entergy Corp. carries a Zacks Rank #3. However, the company’s negative Earnings ESP makes surprise prediction difficult.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.


Entergy Corporation Price and EPS Surprise


Entergy Corporation Price and EPS Surprise | Entergy Corporation Quote


Stocks to Consider

Here are a few operators in the utility space that you may consider, as our model shows that they have the right combination of elements to deliver an earnings beat this quarter:

Edison International EIX has an Earnings ESP of +1.44% and a Zacks Rank #3. The company is scheduled to report fourth-quarter results on Feb 22. You can see the complete list of today’s Zacks #1 Rank stocks here.

Public Service Enterprise PEG has an Earnings ESP of +1.92% and a Zacks Rank #3. The company is scheduled to report fourth-quarter results on Feb 23.

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

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