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Why Is PSEG (PEG) Down 0.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for PSEG (PEG - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PSEG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Public Service Enterprise Q3 Earnings Top, Revenues Miss
Public Service Enterprise Group Inc. or PSEG, reported third-quarter 2020 adjusted operating earnings of 96 cents per share, which exceeded the Zacks Consensus Estimate of 95 cents by 1.1%. However, the bottom line dropped 2% on a year-over-year basis.
Excluding one-time adjustments, the company reported quarterly earnings of $1.14 per share compared with 79 cents in third-quarter 2019.
The year-over-year upside can be attributed to higher revenues and operating income.
Total Revenues
Revenues of $2,370 million in the quarter missed the Zacks Consensus Estimate of $2,523 million by 6.1%. However, the figure rose 3% from the year-ago quarter’s $2,302 million.
In the quarter, electric sales volumes were 12,176 million kilowatt-hours, while gas sales volumes were 504 million therms.
Under Electric sales, Residential sales volumes were 5,014 million kilowatt-hours whereas Commercial and Industrial sales volumes accounted for 7,088 million kilowatt-hours. Other sales accounted for 74 million kilowatt-hours.
Total gas sales volumes witnessed a 7% decrease in firm sales volumes and a 23% decline in non-firm sales volumes of gas.
Highlights of the Release
During the third quarter of 2020, the company reported operating income of $633 million, up from $490 million in the year-ago quarter. Total operating expenses were $1,737 million, down 4.1% from the year-ago quarter.
Interest expenses in the reported quarter were $149 million compared with $147 million in the year-ago quarter.
Segment Performance
PSE&G: Segment earnings were $313 million, down from $344 million in the prior-year quarter. PSE&G’s results in the quarter were adversely impacted by unfavorable operating and Maintenance (O&M) expense on account of more gas work internal labor costs from Tropical Storm Isaias.
PSEG Power: The segment’s adjusted earnings were $167 million compared with $145 million reported in the year-ago quarter.
PSEG Enterprise/Other: The segment’s earnings were $8 million compared with $6 million in the third quarter of 2019.
Financial Update
Long-term debt as of Sep 30, 2020 was $16,885 million, up from the 2019-end level of $15,108 million.
PSEG generated $2,517 million in cash from operations at the end of third-quarter 2020 compared with $2,709 million generated at the end of third-quarter 2019.
2020 Guidance
The company has narrowed its 2020 earnings guidance. Adjusted earnings are now projected in the range of $3.35-$3.50 compared with the prior guided range of $3.30-$3.50 per share. The Zacks Consensus Estimate for earnings is currently pegged at $3.39 per share, lower than the midpoint of the guided range.
PSE&G’s operating earnings are now anticipated to be $1,325-$1, 355 million compared with the prior guided range of $1,310-$1,370 million. The company currently expects PSEG Power operating earnings to be in the range of $385-$430 million compared with the earlier guided range of $345-$435 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted -6.56% due to these changes.
VGM Scores
Currently, PSEG has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, PSEG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is PSEG (PEG) Down 0.6% Since Last Earnings Report?
It has been about a month since the last earnings report for PSEG (PEG - Free Report) . Shares have lost about 0.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PSEG due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Public Service Enterprise Q3 Earnings Top, Revenues Miss
Public Service Enterprise Group Inc. or PSEG, reported third-quarter 2020 adjusted operating earnings of 96 cents per share, which exceeded the Zacks Consensus Estimate of 95 cents by 1.1%. However, the bottom line dropped 2% on a year-over-year basis.
Excluding one-time adjustments, the company reported quarterly earnings of $1.14 per share compared with 79 cents in third-quarter 2019.
The year-over-year upside can be attributed to higher revenues and operating income.
Total Revenues
Revenues of $2,370 million in the quarter missed the Zacks Consensus Estimate of $2,523 million by 6.1%. However, the figure rose 3% from the year-ago quarter’s $2,302 million.
In the quarter, electric sales volumes were 12,176 million kilowatt-hours, while gas sales volumes were 504 million therms.
Under Electric sales, Residential sales volumes were 5,014 million kilowatt-hours whereas Commercial and Industrial sales volumes accounted for 7,088 million kilowatt-hours. Other sales accounted for 74 million kilowatt-hours.
Total gas sales volumes witnessed a 7% decrease in firm sales volumes and a 23% decline in non-firm sales volumes of gas.
Highlights of the Release
During the third quarter of 2020, the company reported operating income of $633 million, up from $490 million in the year-ago quarter. Total operating expenses were $1,737 million, down 4.1% from the year-ago quarter.
Interest expenses in the reported quarter were $149 million compared with $147 million in the year-ago quarter.
Segment Performance
PSE&G: Segment earnings were $313 million, down from $344 million in the prior-year quarter. PSE&G’s results in the quarter were adversely impacted by unfavorable operating and Maintenance (O&M) expense on account of more gas work internal labor costs from Tropical Storm Isaias.
PSEG Power: The segment’s adjusted earnings were $167 million compared with $145 million reported in the year-ago quarter.
PSEG Enterprise/Other: The segment’s earnings were $8 million compared with $6 million in the third quarter of 2019.
Financial Update
Long-term debt as of Sep 30, 2020 was $16,885 million, up from the 2019-end level of $15,108 million.
PSEG generated $2,517 million in cash from operations at the end of third-quarter 2020 compared with $2,709 million generated at the end of third-quarter 2019.
2020 Guidance
The company has narrowed its 2020 earnings guidance. Adjusted earnings are now projected in the range of $3.35-$3.50 compared with the prior guided range of $3.30-$3.50 per share. The Zacks Consensus Estimate for earnings is currently pegged at $3.39 per share, lower than the midpoint of the guided range.
PSE&G’s operating earnings are now anticipated to be $1,325-$1, 355 million compared with the prior guided range of $1,310-$1,370 million. The company currently expects PSEG Power operating earnings to be in the range of $385-$430 million compared with the earlier guided range of $345-$435 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted -6.56% due to these changes.
VGM Scores
Currently, PSEG has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, PSEG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.