Back to top

Image: Bigstock

Evergy (EVRG) Up 6.4% Since Last Earnings Report: Can It Continue?

Read MoreHide Full Article

A month has gone by since the last earnings report for Evergy Inc (EVRG - Free Report) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Evergy 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 catalysts.

Evergy Q3 Earnings Beat Estimates, Revenues Miss

Evergy, Inc.  reported third-quarter 2018 operating earnings of $1.32 per share, beating the Zacks Consensus Estimate by 4.8%. The bottom line was also up 18.9% year over year.

The year-over-year improvement of the bottom line is attributable to higher contribution from Westar retail sales, and the inclusion of KCP&L and GMO earnings, driven by favorable weather.

Excluding merger-related costs, earnings in the third quarter of 2018 were $1.34 compared with $1.19 in the year-ago quarter.

Total Revenues

Evergy’s total revenues came in at $1,582.5 million, improving 99.2% year over year. However, the figure lagged the Zacks Consensus Estimate of $1,660 million by 4.7%.

Highlights of the Release

Total operating expenses increased 98.2% year over year to $1,049.4 million, due to higher fuel and purchased power, along with operation and maintenance expenses.

Interest and related charges in the reported quarter were $89.1 million, up 105.3% from the year-ago quarter.

During the quarter, the company sold 16,386  megawatt hour (MWh) of electricity compared with 8,940 MWh in the year-ago quarter, driven by higher sales volume to all customer classes.

Post the quarter-end, Evergy’s Board of Directors authorized the repurchase of up to 60 million shares and this authorization does not have an expiry date. However, the company expects to repurchase shares within 2020. The company repurchased shares worth $486.1 million during the third quarter of 2018.

Financial Update

Cash and cash equivalents as of Sep 30, 2018 was $697.7 million compared with $3.4 million on Dec 31, 2017.

Long-term debt as of Sep 30, 2018 was $6.64 billion compared with $3.69 billion at the end of 2017.

Cash from operating activities in the first nine months of 2018 was $1,191.6 million, up 60.4% from $742.7 million in the corresponding period of 2017.
 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -22.5% due to these changes.

VGM Scores

Currently, Evergy has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Evergy has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Evergy Inc. (EVRG) - free report >>

Published in