With the Q3 earnings season kicking off this week, what are analysts expecting for Utilities sector earnings?
The Utilities sector is expected to report the 7th highest (year-over-year) earnings growth rate of all eleven sectors at 7.0%. However, this growth rate is below expectations for earnings growth of 8.8% on June 30.
At the industry level, all 5 industries in the sector are projected to report year-over-year earnings growth: Independent Power and Renewable Electricity Producers (14%), Gas Utilities (12%), Multi-Utilities (9%), Electric Utilities (6%), and Water Utilities (5%).
Looking ahead, analysts are predicting double-digit earnings growth for the sector for 2 of the next 4 quarters. From Q4 2026 through Q3 2027, analysts are projecting earnings growth rates of 15.6%, 3.6%, 10.6%, and 9.4%, respectively.
FactSet Senior Energy Analyst Trevor Fugita discusses key trends to watch related to power and the Utilities sector during this earnings season.
The hottest September on record in the U.S. Lower 48 drove load and generation to record monthly highs. Overall, average load in September 2026 reached 541 GW, some 43.5 GW, or 8.7%, higher than the previous high set just one year prior. This increase was partially met by renewable capacity additions, with solar and wind generating 17.4 GW more year-over-year. To bridge the remaining gap, thermal plants were required to run more heavily as well, with gas and coal facilities contributing increases of 9.2 GW and 9.6 GW, respectively, compared to 2025.
While hotter weather certainly drove the magnitude of the record, the continued buildout of data centers to meet AI demand has also played a growing role in adding new load to the grid. This trend has become significant enough that some areas of the country are looking to scale back development and gain a better understanding of what is truly feasible within their large load interconnection queues. One example is Texas Governor Greg Abbott's order to pause new data center approvals pending an audit of current projects within the state's large load interconnection queue.
In the near term, weather patterns such as the forecasted super El Niño will continue to play an outsized role in seasonal demand. Over the longer term, however, the pace of data center buildout will be the key driver of demand growth, with more development pointing toward greater natural gas generation, and slower, more modest growth likely to be met by currently planned increases in renewables and battery storage.
For more commentary and analysis on the power and the Utilities industry, please see Trevor’s additional articles on the FactSet Insight blog.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.