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Eversource (ES) Up 2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Eversource Energy (ES - Free Report) . Shares have added about 2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Eversource 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.
Eversource Q3 Earnings Beat Estimates, Revenues Miss
Eversource Energy reported third-quarter 2019 operating earnings of 98 cents per share, beating the Zacks Consensus Estimate of 94 cents by 4.3%. The reported earnings also improved 7.7% year over year.
Total Revenues
Third-quarter revenues of $2,176 million lagged the Zacks Consensus Estimate of $2,318 million by 6.1% and declined 4.2% from the year-ago figure of $2,271 million.
Highlights of the Release
Operating expenses decreased 7.7% year over year to $1,666.6 million, primarily owing to lower operation and maintenance costs.
Operating income was up 9.3% from the prior-year quarter to $509.3 million. Interest expenses increased 8% year over year to $135.2 million in the quarter.
Its earnings in the first nine months of 2019 included after-tax impairment charge of 64 cents related to the company’s investment in the Northern Pass Transmission (“NPT”) project. However, the project had to be shelved due to an adverse court ruling.
Net income in the quarter under review was $320.8 million, up 10.1% from $291.3 million recorded in the year-ago period.
Segmental Performance
Electric Distribution: Earnings from this segment were up 13.5% from the prior-year quarter to $197.3 million. The upside was primarily attributable to higher distribution revenues, and lower operation and maintenance expenses.
Electric Transmission: Earnings of the segment were down 1.8% year over year to $107.5 million. The decline was due to the absence of benefits from capitalizing interest and equity costs related to the canceled NPT project.
Natural Gas Distribution: This segment’s loss was $17.1 million compared with a loss of $12.6 million in the year-ago quarter. The segment’s weak results were due to the timing of distribution revenues.
Water Distribution: Earnings from this segment were $17.5 million compared with $17.6 million in the year-ago quarter.
Eversource Parent & Other Companies: The segment’s income was $13.7 million compared with $1.1 million in the year-ago quarter. The strong results were due to the absence of Access Northeast impairment charges.
Financial Highlights
Cash was $22.7 million as of Sep 30, 2019, down from $108.1 million on Dec 31, 2018.
Long-term debt (excluding current portion) was $13.4 billion as of Sep 30, 2019, higher than $12.3 billion on Dec 31, 2018.
Guidance
Eversource reiterated its 2019 earnings guidance in the range of $3.40-$3.50 per share. The midpoint of management’s 2019 EPS guidance is $3.45, which is higher than the current Zacks Consensus Estimate of $3.44 for the period.
Excluding NPT impairment charges, the company expects earnings per share to improve 5-7% over the long term.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Eversource has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. 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, Eversource has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Eversource (ES) Up 2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Eversource Energy (ES - Free Report) . Shares have added about 2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Eversource 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.
Eversource Q3 Earnings Beat Estimates, Revenues Miss
Eversource Energy reported third-quarter 2019 operating earnings of 98 cents per share, beating the Zacks Consensus Estimate of 94 cents by 4.3%. The reported earnings also improved 7.7% year over year.
Total Revenues
Third-quarter revenues of $2,176 million lagged the Zacks Consensus Estimate of $2,318 million by 6.1% and declined 4.2% from the year-ago figure of $2,271 million.
Highlights of the Release
Operating expenses decreased 7.7% year over year to $1,666.6 million, primarily owing to lower operation and maintenance costs.
Operating income was up 9.3% from the prior-year quarter to $509.3 million. Interest expenses increased 8% year over year to $135.2 million in the quarter.
Its earnings in the first nine months of 2019 included after-tax impairment charge of 64 cents related to the company’s investment in the Northern Pass Transmission (“NPT”) project. However, the project had to be shelved due to an adverse court ruling.
Net income in the quarter under review was $320.8 million, up 10.1% from $291.3 million recorded in the year-ago period.
Segmental Performance
Electric Distribution: Earnings from this segment were up 13.5% from the prior-year quarter to $197.3 million. The upside was primarily attributable to higher distribution revenues, and lower operation and maintenance expenses.
Electric Transmission: Earnings of the segment were down 1.8% year over year to $107.5 million. The decline was due to the absence of benefits from capitalizing interest and equity costs related to the canceled NPT project.
Natural Gas Distribution: This segment’s loss was $17.1 million compared with a loss of $12.6 million in the year-ago quarter. The segment’s weak results were due to the timing of distribution revenues.
Water Distribution: Earnings from this segment were $17.5 million compared with $17.6 million in the year-ago quarter.
Eversource Parent & Other Companies: The segment’s income was $13.7 million compared with $1.1 million in the year-ago quarter. The strong results were due to the absence of Access Northeast impairment charges.
Financial Highlights
Cash was $22.7 million as of Sep 30, 2019, down from $108.1 million on Dec 31, 2018.
Long-term debt (excluding current portion) was $13.4 billion as of Sep 30, 2019, higher than $12.3 billion on Dec 31, 2018.
Guidance
Eversource reiterated its 2019 earnings guidance in the range of $3.40-$3.50 per share. The midpoint of management’s 2019 EPS guidance is $3.45, which is higher than the current Zacks Consensus Estimate of $3.44 for the period.
Excluding NPT impairment charges, the company expects earnings per share to improve 5-7% over the long term.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Eversource has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. 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, Eversource has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.