Pinnacle West (PNW) Q2 Earnings: Stock To Disappoint?
Zacks Investment Research | Jul 26, 2016 10:02PM ET
Pinnacle West Capital Corporation (NYSE:PNW) will release second-quarter 2016 financial results before the market opens on Aug 2. Last quarter, the utility reported a negative earnings surprise of 69.23%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
As coal constitutes 31% of Pinnacle West’s generation mix, the company is subject to stringent state and federal regulations related to emission control at its plants. This entails either shutting down coal plants completely or incurring heavy expenses for installing emission control equipment at the facilities, which will eat into its margins.
As it is, planned outages at two units in Four Corners generation plant are expected to dent the company’s earnings in the to-be-reported quarter.
However, above-average temperatures in May and high temperatures in June in its service territories are expected to aid the topline as higher air conditioning requirements will boost electricity sales.
Earnings Whispers
Our proven model does not conclusively show that Pinnacle West Capital is likely to beat estimates this quarter. That is because a stock needs to have both a positive Zacks Investment Research
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