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Why Is NiSource (NI) Up 1.9% Since Last Earnings Report?

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It has been about a month since the last earnings report for NiSource (NI - Free Report) . Shares have added about 1.9% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is NiSource due for a pullback? 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 Q3 Earnings Beat Estimates, Revenues Miss

NiSource Inc. delivered net operating earnings of 9 cents per share in third-quarter 2020, which surpassed the Zacks Consensus Estimate of 2 cents by 85.7%. On a GAAP basis, the company reported a loss of 49 cents per share compared with a loss of 2 cents in the year-ago quarter.

Total Revenues

NiSource generated total net revenues of $897.5 million in the third quarter, which missed the Zacks Consensus Estimate of $971.7 million by 7.6%. Further, the top line dipped 3.3% from $927.9 million reported in the year-ago quarter.

Highlights of the Release

Total operating expenses in the quarter under review fell 8.7% year over year to $749.2 million.

Total interest expenses in the reported quarter decreased 0.7% from the prior-year quarter’s figure to $95.2 million.

Financial Update

NiSource's cash and cash equivalents as of Sep 30, 2020 were $58.6 million, down from $139.3 million as of Dec 31, 2019.

Long-term debts (excluding amounts due within a year) as of Sep 30 were $9,208.9 million compared with $7,856.2 million as of Dec 31, 2019.

Net cash flows from operating activities for the first nine months of 2020 were $858.6 million compared with $1,231.8 million for the first nine months of 2019.

Outlook

NiSource reaffirmed its 2020 CapEx guidance at $1.7-$1.8 billion and also retained its 2021 non GAAP net operating earnings in the range of $1.28-$1.36 per share. Also, it expects net operating earnings per share to see a CAGR of 7-9% from 2021 through 2024 including near-term annual growth of 5-7%  through 2023.

During the same time frame, the utility anticipates to invest $1.9-$2.2 billion annually in growth, safety and modernization along with $1.8-$2.0 billion investments in renewable generation assets.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted -11.39% due to these changes.

VGM Scores

Currently, NiSource 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 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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