Is A Beat In Store For Pinnacle West (PNW) In Q4 Earnings?

Pinnacle West Capital Corporation (NYSE:PNW) is likely to beat estimates when it reports fourth-quarter 2017 results on Feb 23. In the third quarter, the utility company delivered a positive earnings surprise of 5.58%.

Why Likely a Positive Surprise

A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Our model conclusively shows that Pinnacle West is likely to beat earnings this quarter as it possesses both components.

Zacks ESP: The company’s Earnings ESP is +12.20%. This is because the Most Accurate estimate is 12 cents, while the Zacks Consensus Estimate is pegged at 10 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Pinnacle West’s Zacks Rank #3, when combined with a positive Earnings ESP increases the possibility of a beat.

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 to Consider

Pinnacle West is expected to gain from improving economic conditions in Arizona, which is likely to have a positive impact on demand.

The company’s continuous investments in traditional generation, transmission & distribution lines will help it serve customers efficiently. The rate increase in August 2017 will impact fourth-quarter 2017 revenues.

The extended planned outage at Four Corners may hamper earnings in the quarter under review.

Other Stocks to Consider

Here are other players from the industry that have the right combination of elements to post an earnings beat this quarter.

Public Service Enterprise Group (NYSE:PEG) has an Earnings ESP of +1.92%. It carries a Zacks Rank #3 and is expected to report fourth-quarter 2017 results on Feb 23. You can see the complete list of today’s Zacks #1 Rank stocks here.

Edison International (NYSE:EIX) has an Earnings ESP of +1.44%. It carries a Zacks Rank #3 and is expected to report fourth-quarter 2017 results on Feb 22.

Eversource Energy (NYSE: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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