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Why Is Con Ed (ED) Down 1.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Consolidated Edison (ED - Free Report) . Shares have lost about 1.2% in that time frame, underperforming the S&P 500.

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

Consolidated Edison Q2 Earnings Beat, Revenues Down Y/Y

Consolidated Edison reported second-quarter 2020 adjusted earnings of 60 cents per share, which surpassed the Zacks Consensus Estimate of 54 cents by 11.1%. The reported figure also improved 3.4% from the prior-year quarter’s adjusted earnings of 58 cents.

Barring one-time adjustments, the company posted GAAP earnings of 57 cents per share, reflecting 23.9% year-over-year growth.

Total Revenues

In the reported quarter, the company’s total revenues of $2,719 million missed the Zacks Consensus Estimate of $2,852 million by 4.7%. Moreover, the top line declined 0.9% from $2,744 million in the year-ago quarter.

Electric revenues totaled $1,983 million in the second quarter, up 0.6% from the prior-year quarter’s $1,971 million. Gas revenues improved 0.9% to $453 million. However, steam revenues declined 6.7% to $84 million. Meanwhile, non-utility revenues amounted to $199 million, falling 15% from $234 million in the year-earlier quarter.

Operating Statistics

Total operating expenses in the second quarter declined 2% year over year to $2,240 million.

Depreciation and amortization, purchased power and taxes other than income taxes grew 13.9%, 8% and 4.5%, respectively, from the prior-year quarter’s numbers.

However, other operations and maintenance, fuel, and gas purchased for resale declined 12.9%, 11.5% and 41.2% year over year, respectively.

Financials

Cash and temporary cash investments as of Jun 30, 2020, summed $1,144 million compared with $981 million as of Dec 31, 2019.

Long-term debt was $19,149 million as of Jun 30, 2020, compared with $18,527 million at 2019-end.

At the end of the second quarter, cash from operating activities amounted to $975 million compared with $1,291 million a year ago.

2020 Guidance

For 2020, the company reaffirmed its adjusted earnings per share guidance in the $4.15-$4.35 range.


 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

At this time, Con Ed has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, 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

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Con Ed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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