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Public Service (PEG) Up 2% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Public Service Enterprise Group Incorporated (PEG - Free Report) . Shares have added about 2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Public Service Tops Q4 Earnings, Revenues Drop Y/Y
Public Service Enterprise or PSEG reported fourth-quarter 2016 adjusted operating earnings of 54 cents per share, which exceeded the Zacks Consensus Estimate of 52 cents by 3.8%. Earnings also improved 8% on a year-over-year basis, reflecting benefits from the company’s expanded investment program as well as continued growth in its regulated utility.
Excluding one–time adjustments, the company reported a quarterly loss of 19 cents per share, as against earnings of 60 cents at the end of fourth-quarter 2015.
During 2016, the company generated adjusted operating earnings of $2.90 per share, beating the Zacks Consensus Estimate of $2.88 by 0.7%. Earnings however declined by a penny from the year-ago equivalent.
Total Revenue
Revenues of $2,090 million in the reported quarter missed the Zacks Consensus Estimate of $2,288 million by 8.7% and also fell 8.3% from the year-ago figure of $2,278 million.
For 2016, the company recorded revenues worth $9,061 million, which missed the Zacks Consensus Estimate of $9,883 million by 8.3%. Revenues also declined 13% from the year-ago figure of $10,415 million.
During the reported quarter, electric sales volume increased 3% to 9,404 million kilowatt-hours while gas sales volume rose 6.9% to 1,046 million therms.
For electric sales, results reflected a 4.9% volume increase in the residential sector, a 2.2% rise in the commercial and industrial sector and 0.5% growth interdepartmentally. However, sales volume of street lighting dropped 1.9%.
Total gas sales volume in the reported quarter increased on a 31.6% rise in firm sales volume of gas despite a 24.9% decline in non-firm sales volume of gas.
Highlights of the Release
During the fourth quarter, the company incurred operating loss of $175 million as against operating income of $532 million in the year-ago quarter. Total operating expenses were $2,265 million, up 29.7% from the year-ago quarter figure.
Interest expenses in the reported quarter were $97 million, down 4.9% from the year-ago level.
Segment Performance
PSE&G: Segment earnings were $193 million, up from $156 million in the prior-year quarter. Quarterly results reflect growth from expanded investment in electric and gas transmission and distribution facilities.
PSEG Power: The segment suffered a loss of $302 million versus earnings of $149 million a year ago. The downside was due to the impact of incremental depreciation and other expenses of $555 million pre-tax associated with the decision to retire the Hudson and Mercer coal/gas-fired generating stations announced on Jun 1, 2017.
PSEG Enterprise/Other: The segment generated operating income of $11 million, compared with operating earnings of $4 million in the fourth quarter of 2015.
Financial Update
As of Dec 31, 2016, cash and cash equivalents were $423 million, compared with $394 million as of Dec 31, 2015.
Long-term debt as of Dec 31, 2016 was $11,395 million, up from the 2015-end level of $9,561 million.
Public Service Enterprise Group generated $3,311 million in cash from operations in 2016, down 15.5% from the year-ago figure.
2016 Guidance
The company provided its 2017 guidance. Earnings are projected in the range of $2.80–$3.00.
PSE&G’s operating earnings are expected in the range of $945–$985 million. The company also expects PSEG Power operating earnings in the $435–$510 million band.
PSEG Enterprise/Other’s operating earnings are estimated at $35 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter. In the past month, the consensus estimate also shifted upward by 10.39 % due to these changes.
Public Service Enterprise Group Incorporated Price and Consensus
At this time, Public Service's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'C'. Following the exact same course, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is suitable for value and momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of this revision also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Public Service (PEG) Up 2% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Public Service Enterprise Group Incorporated (PEG - Free Report) . Shares have added about 2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Public Service Tops Q4 Earnings, Revenues Drop Y/Y
Public Service Enterprise or PSEG reported fourth-quarter 2016 adjusted operating earnings of 54 cents per share, which exceeded the Zacks Consensus Estimate of 52 cents by 3.8%. Earnings also improved 8% on a year-over-year basis, reflecting benefits from the company’s expanded investment program as well as continued growth in its regulated utility.
Excluding one–time adjustments, the company reported a quarterly loss of 19 cents per share, as against earnings of 60 cents at the end of fourth-quarter 2015.
During 2016, the company generated adjusted operating earnings of $2.90 per share, beating the Zacks Consensus Estimate of $2.88 by 0.7%. Earnings however declined by a penny from the year-ago equivalent.
Total Revenue
Revenues of $2,090 million in the reported quarter missed the Zacks Consensus Estimate of $2,288 million by 8.7% and also fell 8.3% from the year-ago figure of $2,278 million.
For 2016, the company recorded revenues worth $9,061 million, which missed the Zacks Consensus Estimate of $9,883 million by 8.3%. Revenues also declined 13% from the year-ago figure of $10,415 million.
During the reported quarter, electric sales volume increased 3% to 9,404 million kilowatt-hours while gas sales volume rose 6.9% to 1,046 million therms.
For electric sales, results reflected a 4.9% volume increase in the residential sector, a 2.2% rise in the commercial and industrial sector and 0.5% growth interdepartmentally. However, sales volume of street lighting dropped 1.9%.
Total gas sales volume in the reported quarter increased on a 31.6% rise in firm sales volume of gas despite a 24.9% decline in non-firm sales volume of gas.
Highlights of the Release
During the fourth quarter, the company incurred operating loss of $175 million as against operating income of $532 million in the year-ago quarter. Total operating expenses were $2,265 million, up 29.7% from the year-ago quarter figure.
Interest expenses in the reported quarter were $97 million, down 4.9% from the year-ago level.
Segment Performance
PSE&G: Segment earnings were $193 million, up from $156 million in the prior-year quarter. Quarterly results reflect growth from expanded investment in electric and gas transmission and distribution facilities.
PSEG Power: The segment suffered a loss of $302 million versus earnings of $149 million a year ago. The downside was due to the impact of incremental depreciation and other expenses of $555 million pre-tax associated with the decision to retire the Hudson and Mercer coal/gas-fired generating stations announced on Jun 1, 2017.
PSEG Enterprise/Other: The segment generated operating income of $11 million, compared with operating earnings of $4 million in the fourth quarter of 2015.
Financial Update
As of Dec 31, 2016, cash and cash equivalents were $423 million, compared with $394 million as of Dec 31, 2015.
Long-term debt as of Dec 31, 2016 was $11,395 million, up from the 2015-end level of $9,561 million.
Public Service Enterprise Group generated $3,311 million in cash from operations in 2016, down 15.5% from the year-ago figure.
2016 Guidance
The company provided its 2017 guidance. Earnings are projected in the range of $2.80–$3.00.
PSE&G’s operating earnings are expected in the range of $945–$985 million. The company also expects PSEG Power operating earnings in the $435–$510 million band.
PSEG Enterprise/Other’s operating earnings are estimated at $35 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter. In the past month, the consensus estimate also shifted upward by 10.39 % due to these changes.
Public Service Enterprise Group Incorporated Price and Consensus
Public Service Enterprise Group Incorporated Price and Consensus | Public Service Enterprise Group Incorporated Quote
VGM Scores
At this time, Public Service's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'C'. Following the exact same course, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is suitable for value and momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of this revision also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.