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What's in Store for American Electric (AEP) in Q4 Earnings?

American Electric Power Company, Inc AEP is slated to release fourth-quarter and full-year 2022 results on Feb 23, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 3.18%. American Electric has a trailing four-quarter earnings surprise of 2.91%, on average.

Factors to Note

During most of the fourth quarter, AEP’s service territories observed mixed weather patterns. While some parts observed warmer-than-normal temperatures, other regions experienced colder-than-normal temperatures along with significant precipitation levels.

American Electric Power Company, Inc. Price and EPS Surprise

American Electric Power Company, Inc. Price and EPS Surprise
American Electric Power Company, Inc. Price and EPS Surprise

American Electric Power Company, Inc. price-eps-surprise | American Electric Power Company, Inc. Quote

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Some parts of its service territories experienced severe weather conditions, along with tornadoes and significant flash floods, which may have disrupted the smooth flow of electricity to its customers. Such fluctuating weather patterns are likely to have caused a mixed impact on the company’s overall revenue performance in the to-be-reported quarter.

Moreover, increased normalized retail load as well as favorable rate changes can be expected to have bolstered American Electric’s fourth-quarter top line performance.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $4.25 billion, indicating a 3.8% improvement from the year-ago quarter.

American Electric’s service territories witnessed tornadoes and flash floods in the fourth quarter, which may have caused infrastructural damage, thus increasing the company’s operating expenses for storm restoration and repair. This, in turn, is likely to have weighed on the company’s bottom line in the to-be-reported quarter.

Nevertheless, solid revenue growth and favorable operating margin are expected to have boosted overall fourth-quarter earnings.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.00 per share, indicating a 2% improvement from the prior-year reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for American Electric 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, which is not the case here.
 
Earnings ESP: The company’s Earnings ESP is -0.58%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Stocks to Consider

Here are three Utility players you may want to consider as these have the right combination of elements to post an earnings beat this season:

DTE Energy DTE has an Earnings ESP of +1.79% and a Zacks Rank #3. It boasts a long-term earnings growth rate of 6%.

The Zacks Consensus Estimate for DTE Energy’s fourth-quarter sales and earnings is pegged at $4.07 billion and $1.22 per share, respectively. DTE boasts a four-quarter earnings surprise of 2.85%, on average.

Sempra Energy SRE has an Earnings ESP of +1.01% and a Zacks Rank #3. The Zacks Consensus Estimate for Sempra Energy’s fourth-quarter sales and earnings is pegged at $3.81 billion and $2.06 per share, respectively.

Sempra Energy boasts a long-term earnings growth rate of 5.7%. SRE has a four-quarter earnings surprise of 6.88%.

Edison International EIX has an Earnings ESP of +0.25% and a Zacks Rank #3. The Zacks Consensus Estimate for EIX’s fourth-quarter sales and earnings is pegged at $3.63 billion and $1.08 per share, respectively.

Edison International boasts a long-term earnings growth rate of 3%. EIX has a four-quarter earnings surprise of 14.88%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Sempra Energy (SRE) : Free Stock Analysis Report

Edison International (EIX) : Free Stock Analysis Report

DTE Energy Company (DTE) : Free Stock Analysis Report

American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report

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