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NiSource (NI) Down 7.9% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for NiSource (NI - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.

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

NiSource's Q2 Earnings Beat Estimates, Revenues Miss

NiSource delivered operating earnings of 13 cents per share in second-quarter 2020, which surpassed the Zacks Consensus Estimate of 7 cents by 85.7%. Also, the bottom line surged 160% from the year-ago quarter’s figure.

On a GAAP basis, the company reported loss of 5 cents per share against earnings of 76 cents in the year-ago quarter.

Total Revenues

NiSource generated total net revenues of $957.4 million in the second quarter, which missed the Zacks Consensus Estimate of $1,073 million by 10.8%. Further, the top line declined 5.4% from $1,011.9 million reported in the year-ago quarter.

Highlights of the Release

Total operating expenses in the quarter under review fell 10% year over year to $792.1 million.

Total interest expenses in the reported quarter increased 3.1% from the prior-year quarter’s figure to $97 million.

It reaffirmed its expected 2020 CapEx at $1.7-$1.8 billion.

Financial Update

NiSource's cash and cash equivalents as of Jun 30, 2020 were $142.2 million, up from $139.3 million as of Dec 31, 2019.

Long-term debts (excluding amounts due within a year) as of Jun 30 were $8,810.2 million compared with $ 7,856.2 million as of Dec 31, 2019.

Net cash flows from operating activities for the first half of 2020 were $707.7 million compared with $926.2 million for the first half of 2019.

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. The consensus estimate has shifted -55.56% due to these changes.

VGM Scores

Currently, NiSource has a nice Growth Score of B, though it is lagging a bit on the Momentum Score 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.

Outlook

NiSource has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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