Utilities moved higher
In the week ending August 3, utility stocks trended higher and the Utilities Select Sector SPDR ETF (XLU) rose 1.3%. Broader markets rose 0.8% during the week. Many top utilities reported their second-quarter financial results last week. The favorable weather had a positive impact many utilities’ quarterly numbers.
The ten-year Treasury yields rose to 3.0%. Utility stocks and Treasury yields usually trade inversely to each other. Rising interest rates are generally seen as negative for utilities due to their heavy capital needs. Since the second rate hike in June, broader utilities have risen more than 8%.
Leaders and laggards
NextEra Energy (NEE), the biggest utility by market capitalization, rose 2.5% last week. NextEra Energy is one of the top stocks among its peers in 2018. The stock has gained more than 10% in 2018. Duke Energy (DUK), the largest regulated utility in the country, rose 0.6% during the week. Duke Energy reported adjusted earnings of $0.93 per share for the quarter ending on June 30 and missed the consensus estimates.
Dominion Energy (D) reported an adjusted EPS of $0.86 for the second quarter and beat the consensus estimates. Dominion Energy’s EPS has risen more than 28% year-over-year. The stock rose 1.2% last week.
Southern Company (SO) stock rose 2% during the week. The company is scheduled to report its second-quarter earnings on August 8. Read Will Southern Company Report Higher Earnings in Q2 2018? to learn more.
NRG Energy (NRG) stock was one of the top gainers in utilities last week. The stock rose more than 3%. NRG Energy that its adjusted EBITDA rose 23% YoY to $843 million from $686 million. NRG Energy’s earnings were boosted by increased contributions from its retail and generation segments.