Predictions for the Utilities Sector in Q2 2025
The upcoming earnings report for the Utilities sector in Q2 2025 is anticipated to reveal strong performance trends driven by factors such as new electric, natural gas, and water rates, along with effective cost-saving measures and increasing customer numbers. Additionally, demand from data centers is expected to further bolster the sector’s financial results. According to projections, earnings are estimated to rise by 0.7% alongside a revenue increase of 7.5%.
Factors Influencing Utility Earnings
A variety of elements are set to influence the earnings results of utility companies this quarter. Higher electricity rates, strategic acquisitions, and ongoing energy-efficiency initiatives have all contributed positively. Utilities are focusing on enhancing their infrastructure’s resilience against extreme weather and are shifting toward more affordable, renewable energy sources.
Moreover, advancements in technology, such as the installation of smart meters, are improving operational efficiency, enhancing data collection, and fostering better relationships with customers. These innovations are likely to reduce costs while boosting revenue and optimizing grid management.
An uptick in economic conditions across their service areas has led to increased demand for utility services, benefiting overall company performance. The rapidly growing data center industry, particularly those catering to artificial intelligence, has also pushed up electricity consumption, providing an additional revenue stream. Geopolitical factors are driving the reshoring of industries, further expanding the need for utility services.
These combined factors are expected to have a favorable impact on the overall performance of utilities in the second quarter.
Utility Stocks to Watch This Earnings Season
MDU Resources Group
MDU Resources has transitioned solely into regulated energy delivery following its split from Everus Construction Group. The company has likely experienced growth in electric and natural gas customer bases, which would contribute to demand increases and earnings enhancement. Additionally, the availability of essential materials and equipment, combined with rising demand from data centers, is expected to boost its bottom line.
The earnings consensus for MDU in Q2 stands at 13 cents per share, reflecting a decrease of 59.4% compared to the same quarter last year. However, the company boasts an Earnings ESP of +20% and holds a Zacks Rank of #2.
ONE Gas
Operating as a fully regulated natural gas distribution utility, ONE Gas is also expected to benefit from established new rates and ongoing investments in infrastructure enhancement. Continuous growth in customer numbers and the implementation of new meter sets are projected to positively impact financial results.
The earnings consensus for ONE Gas in the second quarter is set at $1.75 per share, marking a 37.8% increase year-over-year. The company enjoys an Earnings ESP of +3.22% and a Zacks Rank of #2.
Sempra Energy
Sempra Energy is actively engaged in the sale, distribution, storage, and transportation of both electricity and natural gas. The organization is anticipated to derive advantages from its investments in renewable energy generation, which come with long-term purchase agreements for electricity sales. In addition, demand from data centers is likely to further drive its earnings.
The Q2 earnings consensus for Sempra is at 83 cents per share, reflecting a 6.7% decline from the previous year. Presently, Sempra has an Earnings ESP of +0.60% and a Zacks Rank of #2.
Spire Inc.
Spire is consistently expanding its operations organically through systematic investments in infrastructure and innovation. Expected to report positive fiscal third-quarter earnings, Spire’s success is likely to stem from advanced meter installations and growing customer numbers. Its Midstream operations may also benefit from enhanced storage capacities and elevated contract rates.
The earnings consensus for Spire in the third quarter is projected at a loss of 9 cents per share, indicating a 35.7% improvement over the loss reported last year. Spire currently holds an Earnings ESP of +14.81% and carries a Zacks Rank of #3.
Conclusion
The utilities sector is poised for a significant earnings season, bolstered by various growth factors and technological advancements. As these companies adapt to market demands and enhance service delivery, their performance is expected to resonate positively with investors and stakeholders alike. Keep an eye on MDU Resources, ONE Gas, Sempra Energy, and Spire Inc. for promising developments in this earnings season.
