Sempra Energy (SRE) to Post Q3 Earnings: Is a Beat in Store?

Sempra Energy SRE is set to report third-quarter 2018 results on Nov 7, before market open.

In the last reported quarter, the company delivered a positive earnings surprise of 15.38%. Moreover, it surpassed the Zacks Consensus Estimate for earnings in two of the trailing four quarters, the average beat being 2.75%.

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

Why a Likely Positive Surprise?

Our proven model shows that Sempra Energy is likely to beat estimates this quarter. That is because it has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Sempra Energy has an Earnings ESP of +1.77%.

Sempra Energy Price and EPS Surprise

Sempra Energy Price and EPS Surprise | Sempra Energy Quote

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into earnings announcements.

Factors at Play

In the second quarter of 2018, Sempra Energy’s  Oncor acquisition contributed a solid $114 million to the company’s bottom line.  This transaction is likely to aid the company’s bottom line in the third quarter as well.

In line with this, the Zacks Consensus Estimate for earnings is pegged at $1.13, reflecting a year-over-year improvement of 8.7%.

Meanwhile, Sempra Energy’s service territories witnessed warmer-than-normal temperature for most parts of the third quarter. This indicates at increased electricity demand in the region, which in turn must have boosted the company’s top line. The Zacks Consensus Estimate for quarterly revenues stands at $2.83 billion, mirroring an increase of 5.5% year over year.

Other Stocks That Warrant a Look

Here are some other companies from the Utility sector you may want to consider as our model shows that these too have the right combination of elements to post earnings beat this quarter:

Southwest Gas Corporation SWX has an Earnings ESP of +82.14% and a Zacks Rank #3. The company is expected to report third-quarter 2018 results on Nov 6.

Spire Inc. SR is expected to announce fourth-quarter fiscal 2018 results on Nov 15. The company has an Earnings ESP of +2.06% and is a Zacks #3 Ranked player.

Southern Company SO is expected to release third-quarter 2018 results on Nov 7. The company has an Earnings ESP of +0.37% and a Zacks Rank #2.

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