Xcel Energy (XEL) third-quarter earnings and revenue expectations are lagging

Xcel Energy (XEL) came out with quarterly earnings of $1.25 per share, missing the Zacks Consensus Estimate of $1.29 per share. This compares with earnings of $1.23 per share a year ago. These figures have been adjusted for one-off items.

This quarterly report represents an earnings surprise of -3.10%. A quarter ago, it was expected that this utility would post earnings of $0.55 per share when it actually produced earnings of $0.54, delivering a surprise of -1.82%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Xcel, which belongs to the Zacks Utility – Electric Power industry, posted revenues of $3.64 billion for the quarter ended September 2024, missing the Zacks Consensus Estimate by 8.12%. This compares to revenues of $3.66 billion a year ago. The company has failed to beat consensus estimates over the last four quarters.

The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings outlook.

Xcel shares are up about 1.8% since the beginning of the year, versus the S&P 500’s gain of 21.9%.

While Xcel has underperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this important question, but one reliable measure that can help investors address this issue is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock prices and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this earnings release, the estimate revision trend for Xcel was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the coming quarters and the current fiscal year will change in the coming days. The current consensus EPS estimate is $0.85 on $3.8 billion in revenue for the coming quarter and $3.55 on $14.48 billion in revenue for the current fiscal year.

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