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Why Is Clearway Energy (CWEN) Up 0.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for Clearway Energy (CWEN - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Clearway Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Clearway Energy Q3 Earnings Miss Mark, Sales Up Y/Y

Clearway Energy Inc.  reported third-quarter 2020 earnings of 31 cents per share, which missed the Zacks Consensus Estimate of 73 cents by 57.5%. Earnings for the reported quarter were down 13.9% from the year-ago quarter.

Total Revenues

The company's total revenues for third-quarter 2020 were $332 million, which lagged the Zacks Consensus Estimate of $352 million by 5.7%. However, total revenues improved 12.2% year over year.

Highlights of the Release

On Apr 20, Clearway Energy announced that it has entered into binding agreements with Clearway Group that will enable the former to acquire and invest in a portfolio of renewable energy projects, as well as expand the clean power generation portfolio.

Total operating expenses for the third quarter amounted to $209 million, increasing 1.45% from the year-ago period. Operating income was $123 million, up 36.7% from the year-ago level.

Interest expenses for the quarter were $85 million, decreasing 19.8% year over year.

Financial Position

Clearway Energy had cash and cash equivalents of $359 million as of Sep 30, 2020, up from $155 million on Dec 31, 2019. Total liquidity as of Sep 30, 2020 was $973 million, which was higher than the Dec 31, 2019 level of $842 million. The improvement was due to the release of previously restricted distributions from unconsolidated investments impacted by the PG&E bankruptcy, proceeds raised through corporate financings, distributions from non-recourse refinancing, and the proceeds from the residential solar portfolio divestiture.

Long-term debt as of Sep 30, 2020 was $6,357 million, reflecting a 28.3% increase from $4,956 million on Dec 31, 2019.

The company's net cash flow from operating activities for the first nine months of 2020 was $441 million compared with $374 million in the comparable prior-year period.

Guidance

Clearway Energy reaffirmed its 2020 Cash Available for Distribution (CAFD) guidance of $310 million. The company initiated its 2021 CAFD guidance of $325 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 97.53% due to these changes.

VGM Scores

Currently, Clearway Energy has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Clearway Energy has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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