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CMS Energy (CMS) Down 4.6% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for CMS Energy (CMS - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is CMS 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 drivers.

CMS Energy's Q2 Earnings Beat Estimates, Revenues Miss

CMS Energy Corporation CMS reported second-quarter 2020 adjusted earnings per share (EPS) of 49 cents, which surpassed the Zacks Consensus Estimate of 45 cents by 8.9%. Moreover, the bottom line surged 48.5% from 33 cents per share in the year-ago quarter.

Including one-time items, the company posted GAAP earnings of 48 cents per share in the reported quarter, up from 33 cents in the year-ago quarter.

The year-over-year uptick in the bottom line can be attributed to cost management coupled with favorable weather and sales mix.

Operational Performance

In the quarter under review, CMS Energy’s operating revenues summed $1,443 million, which missed the Zacks Consensus Estimate of $1,512 million by 4.6%. The top line also edged down 0.1% on a year-over-year basis.

The company’s operating expenses declined 4.6% to $1,170 million in the quarter under review.

Operating income in the second quarter was $273 million, up 25.2% from $218 million in the year-ago quarter.

CMS Energy’s interest charges were $141 million, up 7.6% from $131 million in the year-ago period.

Financial Condition

CMS Energy had cash and cash equivalents of $1,587 million as of Jun 30, 2020, up from $140 million as of Dec 31, 2019.

As of Jun 30, 2020, total debt, capital leases and financing obligations (excluding securitization debt) were $14,987 million, up from $12,996 million as of Dec 31, 2019.

At the end of the first half of 2020, cash from operating activities amounted to $796 million compared with $1,185 million in the first half of 2019.

2020 Guidance

CMS Energy reaffirmed its adjusted earnings per share guidance of $2.64-$2.68 for 2020. The Zacks Consensus Estimate for the company’s 2020 earnings is currently pegged at $2.65, below the midpoint of the company’s guidance range.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted 17.11% due to these changes.

VGM Scores

At this time, CMS Energy has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. 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

CMS Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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