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What to Expect from CenterPoint Energy’s 3Q16 Earnings

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CenterPoint Energy to report on November 4

CenterPoint Energy (CNP) will report its 3Q16 financial results on November 4, 2016. Analysts expect CenterPoint to earn $0.37 per share in 3Q16. It reported earnings of $0.34 per share in the corresponding quarter last year.

CenterPoint Energy is targeting annual earnings growth of 4%-6% through 2018. The management has given a 2016 full-year earnings guidance range of $1.12 per share to $1.20 per share. Its earnings were drastically affected in the last few quarters by its stake in Enable Midstream Partners. In 2015, CNP’s earnings fell nearly 15% driven by a large earnings drop from Enable Midstream.

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Earnings drivers

According to analysts, CenterPoint Energy is expected to report revenues of $1.86 billion against its revenues of $1.6 billion in the same period last year. The performance of US utilities will probably be better than the same quarter last year due to favorable weather.

The company’s management expects its earnings to be driven by transmission and distribution operations, and more than 75% of its earnings per share will come from these operations. CenterPoint is actively investing in its transmission and distribution infrastructure in order to maintain earnings growth.

CenterPoint holds a 55.4% stake in Enable Midstream Partners (ENBL) and it’s reviewing this stake for a sale, spin-off, or even continued ownership. Enable Midstream’s earnings are under pressure due to the massive fall in energy commodity prices since mid-2014.

Utility (XLU) giants Duke Energy (DUK) and AES (AES) will also announce their third quarter earnings on November 4, 2016.

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