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Why Is Dominion Energy (D) Down 4.3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Dominion Energy (D - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Dominion Energy due for a breakout? 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.

Dominion Energy Q2 Earnings Beat Estimates, Sales Miss

Dominion Energy Inc.  reported second-quarter 2020 operating earnings of 82 cents per share, which beat the Zacks Consensus Estimate by a penny. Operating earnings were 6.5% higher than the year-ago figure of 77 cents. The quarterly earnings were near the upper end of the guidance range of 75-85 cents per share.

GAAP loss was $1.41 per share versus earnings of 5 cents in the year-ago quarter. The difference between GAAP and operating earnings was primarily attributable to impairment-related charges associated with the Atlantic Coast Pipeline and Supply Header projects, along with net gains on its nuclear decommissioning trust funds.

Total Revenues

Dominion Energy’s total revenues came in at $3,585 million, which lagged the Zacks Consensus Estimate of $3,995 million by 10.3% and declined 9.7% from $3,970 million in the year-ago quarter.

Highlights of the Release

Total operating expenses decreased 13.2% year over year to $3,045 million due to lower electric fuel and energy-related purchases, as well as decrease in operating and maintenance costs.

Interest and related charges for the reported quarter were $449 million, down 0.7% from the year-ago period.

Segment Details

Dominion Energy Virginia: Net income from this segment was $437 million, up 11.2% year over year.

Gas Transmission & Storage: The segment’s net income was $184 million, increasing 4% year over year.

Gas Distribution: Net income from this segment was $87 million, down 31.2% on a year-over-year basis.

Dominion Energy South Carolina: Net income from this segment was $75 million, down 21% year over year.

Contracted Generation: The segment’s net income was $21 million, up 61.5% year over year.

Corporate and Other: The segment’s net loss was $98 million, narrower than a loss of $125 million in the year-ago quarter.

Financial Highlights

As of Jun 30, 2020, Dominion Energy had cash and cash equivalents of $675 million, up from $166 million on Dec 31, 2019.

Total long-term debt as of Jun 30, 2020 was $33,848 million, up from $30,313 million on Dec 31, 2019.
    
In first-half 2020, cash provided from operating activities was $3,136 million, up 35.6% from $2,313 million in the comparable year-ago period.

Guidance

For third-quarter 2020, Dominion Energy expects operating earnings within 85 cents to $1.05 per share. The company reported earnings of $1.18 per share in the year-ago period. The midpoint of the above guided range is 95 cents, lower than the current Zacks Consensus Estimate for the period of $1.01.

Dominion Energy reaffirmed its 2020 earnings guidance in the range of $3.37-$3.63 per share. The company recorded earnings of $4.24 per share in 2019. The current Zacks Consensus Estimate for 2020 is pegged at $3.63.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

At this time, Dominion Energy has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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

Dominion Energy has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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