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What's in the Offing for CMS Energy (CMS) in Q4 Earnings?

Zacks Equity Research
·3-min read

CMS Energy Corporation CMS is slated to report fourth-quarter and full-year 2022 results on Feb 2, before the opening bell.

Its bottom line outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.66%.

Factors to Note

During the fourth quarter, CMS Energy’s service territories witnessed more or less normal temperatures, accompanied with drier-than-normal precipitation. So, the overall impact of the weather pattern on the company’s Q4 results is expected to have been moderate.

Moreover, strong load growth on the commercial and industrial front is likely to have ramped up new connections, thereby contributing to the company’s revenues in the to-be-reported quarter.

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The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.19 billion, indicating an improvement of 7.5% from the year-ago quarter.

CMS Energy Corporation Price and EPS Surprise

CMS Energy Corporation Price and EPS Surprise
CMS Energy Corporation Price and EPS Surprise

CMS Energy Corporation price-eps-surprise | CMS Energy Corporation Quote

From the cost perspective, CMS Energy has been successfully eliminating waste through its Consumers Energy Way, which might have resulted in cost savings in the soon-to-be-reported quarter and offset the impact of inflation to some extent. Moreover, rate relief received from the company’s constructive gas rate case settlement, implemented from October 2022, is also expected to have boosted CMS Energy’s Q4 bottom line.

However, the company’s planned increase in operating and maintenance expense, largely driven by customer initiatives, might have had some adverse impact on the earnings performance in the soon-to-be-reported quarter.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 60 cents per share, indicating an improvement of 27.7% from the prior-year reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for CMS Energy this time. 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 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CMS carries a Zacks Rank #4 (Sell).

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:

Dominion Energy D has an Earnings ESP of +0.32% and a Zacks Rank #3.

Dominion Energy boasts a long-term earnings growth rate of 5.8%. The Zacks Consensus Estimate for Dominion Energy’s fourth-quarter sales and earnings is pegged at $4.20 billion and $1.03 per share, respectively.

American Electric Power AEP has an Earnings ESP of +1.94% and a Zacks Rank #3. The Zacks Consensus Estimate for its fourth-quarter earnings, pegged at $1.03 per share, implies an improvement of 5.1% from the prior-year quarter’s tally.

The Zacks Consensus Estimate for AEP’s fourth-quarter sales is pegged at $4.32 billion. AEP has a four-quarter earnings surprise of 2.91%.

Consolidated Edison (ED) has an Earnings ESP of +2.88% and a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter earnings is pegged at 79 cents per share, indicating a decline of 21% from the prior-year reported figure.

Consolidated Edison boasts a four-quarter earnings surprise of 9.06%, on average. The Zacks Consensus Estimate for ED’s fourth-quarter sales is pegged at $3.53 billion, suggesting growth of 3.4% from the prior-year reported figure.

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

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

CMS Energy Corporation (CMS) : Free Stock Analysis Report

Dominion Energy Inc. (D) : Free Stock Analysis Report

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Zacks Investment Research