By Geraldine Amiel 
 

TAKING THE PULSE: The deterioration of Europe's economy due to the sovereign debt crisis has provided a difficult environment for the region's utilities so far this year. The sector faces lower-than-expected regulated tariff increases, depressed electricity prices and reduced energy consumption.

Some companies are handling this by embracing cost savings, while others could delay or even cancel expansion plans, industry analysts said.

German utility E.ON AG (EOAN.XE) was the one exception, facing a brighter outlook thanks to the improved prices secured in the renegotiation of its long-term gas supply contracts with Russia.

All eyes are set on financial targets for the second half of the year, for which the economic situation in the euro zone and its periphery remains the key.

     COMPANIES TO WATCH: 
 
    Iberdrola SA (IBE.MC): First half, July 25 before market open 
 

MARKET EXPECTATIONS: Iberdrola's first-half net profit is likely to be hurt by cuts in government-guaranteed remuneration, but higher power prices should help to offset these reductions.

MAIN FOCUS: Analysts expect Iberdrola to discuss pending electricity sector reforms that could further cut into its profits, in a government effort to reduce the difference between the cost of generating electricity and the amount consumers pay. Investors will be watching for comments about the company's plans for its investments in Brazil.

 
    Electricite de France SA (EDF.FR): First half, August 1 after market close 
 

MARKET EXPECTATIONS: Higher hydroelectric output, due to a wet spring, should have boosted the group's power generation in the first half, but that is not expected to be enough to compensate for lower nuclear output in both France and the U.K. Analysts expect first half earnings before interest, tax, depreciation and amortization, or Ebitda, of around EUR8.5 billion and net recurring profit of around EUR2.5 billion, as indicated previously by the group's Chief Financial Officer, Thomas Piquemal.

MAIN FOCUS: Analysts expect the group to confirm its full-year guidance of Ebitda between EUR15.8 billion and EUR16.2 billion, and net profit of around EUR4 billion, thanks to stable nuclear output and the increase of regulated tariffs in France. A lot will depend on the renegotiation of the gas contract at EDF's Edison unit in the second half, so any comment on the matter from the management will be welcome. Analysts will also be looking for EDF's view of the new French government's energy strategy, notably for nuclear and renewables.

 
    Enel SpA (E): First half, August 2 
 

MARKET EXPECTATIONS: First-half Ebitda at Italy's biggest utility is expected to be more than 7% lower at EUR8.25 billion, driven by weaker electricity operations. The key net debt figure is predicted to increase to around EUR48 billion, due to the company's dividend payment and adverse foreign exchange effects.

MAIN FOCUS: Investors will keenly watch if there are any changes to 2012 targets. Focus will also be on any comments on operations in Spain, and the possibility of the Madrid government raising taxes to boost public coffers. Any comments on Latin American operations, which have helped sustain the company's share price recently, will also be keenly followed.

 
    CEZ AS (BAACEZ.PR): Second quarter, August 9, 0600 GMT 
 

MARKET EXPECTATIONS: CEZ has full-year guidance for net profit of CZK41 billion, up a sliver from 2011's net result of CZK40.8 billion. It expects full year Ebitda of CZK87.9 billion. Analysts say the company may be able to reach the target, but it faces challenges in the second half of the year. The key risk is uncertainty in the euro zone, which is a significant destination for CEZ's electricity exports, and is where Europe's power prices are set. The contracting Czech economy is also a concern.

MAIN FOCUS: CEZ is now focused on its nuclear expansion plans and is mulling divestments to free up cash. Analysts will be looking for any new information about how CEZ plans to finance its nuclear roll out, including whether the dividend will be scaled back. They will also be looking to see if CEZ can secure government guarantees on the sale price of power to be produced at the new reactors, or if it can bring in a strategic partner for the nuclear expansion.

 
    E.ON AG (EOAN.XE): Second quarter, August 13, before market open 
 

MARKET EXPECTATIONS: Germany's largest utility by market value is expected to post a year-on-year increase in second-quarter profits, due mainly to a recent agreement with Russia's gas exporting monopoly OAO Gazprom (GAZP.RS) over long-term gas supply contracts. The deal to retroactively adjust commercial terms of gas supply contracts, announced July 3, should boost Ebitda in the first half 2012 by about EUR1 billion, E.ON has said. The deal also prompted the company to raise its full-year earnings guidance.

MAIN FOCUS: Having solved what E.ON previously said was its single largest operating risk, by agreeing on adjusted gas supply deals with Gazprom, investors' focus is expected to shift to present trading conditions in central and western European power markets. Electricity prices across the continent remain depressed due to the ailing European economy and the increasing share of renewables in power generation. E.ON has said it plans to decommission some loss-making power plants in Germany, in response to the difficult trading conditions. Investors will also be keen for an update on E.ON's cost-cutting plans, which aim to wring savings of EUR1.5 billion from its operations through to 2015.

Ilan Brat in Madrid, Sean Carney in Prague, Jan Hromadko in Frankfurt and Liam Moloney in Rome contributed to this story

-Write to Geraldine Amiel at geraldine.amiel@dowjones.com