Quarterly financial reports play a vital role on Wall Street, as they help investors see how a company has performed and what might be coming down the road in the near-term. And out of all of the metrics and results to consider, earnings is one of the most important.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information. The ESP is calculated by comparing the Most Accurate Estimate to the Zacks Consensus Estimate, with the percentage difference between the two giving us the Zacks ESP figure.

The final step today is to look at a stock that meets our ESP qualifications. Atmos Energy (ATO) earns a Zacks Rank #2 30 days from its next quarterly earnings release on May 7, 2025, and its Most Accurate Estimate comes in at $3.03 a share.

By taking the percentage difference between the $3.03 Most Accurate Estimate and the $2.92 Zacks Consensus Estimate, Atmos Energy has an Earnings ESP of 3.77%.

ATO is just one of a large group of Utilities stocks with a positive ESP figure. Consolidated Edison (ED) is another qualifying stock you may want to consider.

Consolidated Edison, which is readying to report earnings on May 1, 2025, sits at a Zacks Rank #3 (Hold) right now. It's Most Accurate Estimate is currently $2.38 a share, and ED is 24 days out from its next earnings report.

The Zacks Consensus Estimate for Consolidated Edison is $2.30, and when you take the percentage difference between that number and its Most Accurate Estimate, you get the Earnings ESP figure of 3.25%.

Because both stocks hold a positive Earnings ESP, ATO and ED could potentially post earnings beats in their next reports.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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Atmos Energy Corporation (ATO) : Free Stock Analysis Report

Consolidated Edison Inc (ED) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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