The Zacks Utilities sector’s second-quarter 2025 earnings are expected to have continued to benefit from new electric, natural gas and water rates, cost-saving initiatives and customer growth. The bottom line is also likely to have gained from growing demand from data centers. Per the latest Earnings Preview, the sector’s quarterly earnings are expected to rise 0.7% on 7.5% higher revenues.
With the assistance of the Zacks Stock Screener, we have identified four utilities, namely MDU Resources Group MDU, ONE Gas OGS, Sempra Energy SRE and Spire SR, which are poised to beat on earnings this reporting cycle.
These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) — to surpass expectations. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Utility service providers continue to benefit from certain factors, including higher electricity rates, accretive acquisitions, cost reductions and the implementation of energy-efficiency programs. Utilities also gain from continuous efforts to make existing infrastructure more resilient to adverse weather conditions and the ongoing switch to affordable, renewable energy sources for electricity production.
Utilities have been focusing on installations of smart meters, which help enhance data collection, improve operational efficiency and encourage better customer engagement. These advancements lead to reduced costs, increased revenue and improved grid management.
Improvement in economic conditions in the service territories has created fresh demand for utility services and boosted the companies’ revenues and performance.
Utilities are also set to take advantage of the growing demand from data centers. The rise of data centers, particularly those supporting artificial intelligence, has led to a significant increase in electricity consumption. This should have directly benefited utilities and generated higher revenues in the yet-to-be-reported quarter. Reshoring of industries due to geo-political uncertainties is also creating fresh demand for utility services.
All these factors are expected to have had a positive impact on the utilities’ second-quarter overall performance.
MDU Resources is now a pure-play regulated energy delivery business after the successful spinoff of Everus Construction Group. The company is likely to have benefited from electric and natural gas customer growth, which would have increased demand and boosted earnings. The bottom line is also expected to have gained from the continued availability of necessary equipment and materials and increased demand from data centers.
The Zacks Consensus Estimate for second-quarter earnings is pegged at 13 cents per share, indicating a decrease of 59.4% from the year-ago reported figure. MDU currently has an Earnings ESP of +20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
