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CenterPoint (CNP) Up 3.2% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for CenterPoint Energy, Inc. (CNP - Free Report) . Shares have added about 3.2% 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.

CenterPoint Energy Beats on Q1 Earnings, Keeps View

CenterPoint Energy reported first-quarter 2017 earnings of $0.37 per share, beating the Zacks Consensus Estimate of $0.36 by 2.8%. Quarterly earnings also improved from the year ago quarter’s figure of $0.32.

Revenues

CenterPoint Energy’s total revenue in the reported quarter was $2,735 million, missing the Zacks Consensus Estimate of $2,321 million by 17.8%. Revenues were also 37.9% higher than $1,984 million reported a year ago.

The increase in the top line was mainly due to higher contribution from Natural Gas Distribution and Energy Services, offset marginally by lower contribution from Electric Transmission & Distribution Energy Services.

Operational Results

Total expenses during the quarter increased 41.9% to $2,461 million.

The company’s operating income increased 9.6% to $274 million from $250 million in the year-ago quarter.

Interest and other finance charges decreased to $78 million in the reported quarter from $87 million a year ago.

Segment Results

The Electric Transmission & Distribution segment reported operating income of $78 million during the first quarter, compared with $83 million in the year-ago quarter.

The Natural Gas Distribution segment reported operating income of $164 million, compared with $160 million in the year-ago quarter.

The Energy Services segment reported operating income of $20 million, compared with $15 million in the year-ago quarter.

Financial Condition

As of Mar 31, 2017, CenterPoint Energy had cash and cash equivalents of $254 million, down from $341 million as of Dec 31, 2016.

Total long-term debt was $7,892 million as of Mar 31, 2017, up from $7,532 million as of Dec 31, 2016.

In the first quarter, the company’s net cash from operating activities was $319 million, down from $637 million in the year-ago period.

Also, CenterPoint Energy’s total capital expenditure was $298 million, down from $309 million in the year-ago quarter.

Guidance

CenterPoint Energy reaffirmed its 2017 earnings guidance in the range of $1.25–$1.33 per diluted share. This includes estimated utility operations earnings of $0.93–$0.97 per diluted share and midstream investment earnings of $0.31–$0.37 per diluted share.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, CenterPoint's stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile 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.

Based on our scores, the stock is more suitable for value and growth investors than momentum investors.

Outlook

The company has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.


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