Earnings trends in the utility sector, which accounts for 3.1% of the market cap, are on track to outpace members of the S&P 500. It’s projected that utilities earnings will improve 6% in the first quarter, while S&P 500 earnings are expected to be down 8%.
While we saw a string of utilities earnings reports last month, there are two companies slated to post their results this week: AGL Resources Inc. and ONEOK.
AGL Resources Inc. (GAS)
Investors will be keeping a close eye on AGL’s results, which are expected to be released on Tuesday, May 3.
In the previous quarter, the company posted lower-than-expected earnings of $0.72 per share. Analysts are expecting EPS of $1.64 for the first quarter.
AGL recently received regulatory approval for a proposed merger with Southern Company (SO) from the Georgia Public Service Commission. AGL is Atlanta Gas Light’s parent company, which is a regulated utility that offers natural gas distribution services to over a million customers in Georgia.
A positive earnings surprise and a successful merger may drive this stock up in the near future.
ONEOK will also post its first-quarter results on May 3 after the market closes.
The company closed the year on a great note, posting a 17% increase in cash flow year-over-year. But investors will want to keep a close eye on operating income in its natural gas pipeline industry, which will likely have been affected by the energy slump.
Last quarter, the company’s natural gas pipeline business saw an 11.9% decline in its operating income. Full-year operating income from the segment was down 15.5%.
Analysts are expecting $0.41 earnings per share and revenue of $2.11 billion.
The majority of S&P 500 earnings will be released by the end of the week, so it’s worthwhile to focus on these gas utilities.
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