A month has gone by since the last earnings report for FirstEnergy (
FE Quick Quote FE - Free Report) . Shares have added about 1.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is FirstEnergy due for a pullback? 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 catalysts.
FirstEnergy's Q4 Earnings & Revenues Lag Estimates FirstEnergy delivered fourth-quarter 2020 operating earnings of 32 cents per share, which missed the Zacks Consensus Estimate of 50 cents by 36%. Also, the bottom line declined 41.8% from the year-ago quarter’s figure. On a GAAP basis, the company delivered earnings of 45 cents per share against the loss of 20 cents incurred in the prior-year quarter. Total Revenues
FirstEnergy generated revenues of $2.5 billion in the fourth quarter, which missed the Zacks Consensus Estimate of $2.8 billion by 10.7%. Also, the top line moved down 7.4% from $2.7 billion in the year-ago quarter.
Highlights of the Release
Residential sales increased marginally on a year-over-year basis. Commercial deliveries dipped 5.4% while industrial sales fell 5.1% year over year. Total distribution deliveries slipped 3.1% from the prior-year quarter’s level due to the ongoing pandemic’s impact on commercial and industrial sales.
Total operating expenses in the quarter under review came in at $2,143 million, up 4.1% from $2,058 million in the prior-year quarter. In the fourth quarter, operating income was $394 million, down 35.9% from $615 million in the year-ago quarter. Financial Update
FirstEnergy had cash, cash equivalents and restricted cash worth $1,801 million as of Dec 31, 2020 compared with $679 million on Dec 31, 2019.
Long-term debt and other long-term obligations as of Dec 31, 2020 were $22,131 million, up from $19,618 million on Dec 31, 2019. Net cash provided by operating activities in 2020 was $1,423 million compared with $2,467 million in 2019. Guidance
Management expected the company’s 2021 earnings per share (EPS) outlook in the range of $2.40-$2.60 with the current Zacks Consensus Estimate pegged at $2.61. Also, the company expects first-quarter 2021 EPS in the range of 62-72 cents with the current Zacks Consensus Estimate pegged at 69 cents. It anticipates investing $3 billion in the ongoing year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
At this time, FirstEnergy has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 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.
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, FirstEnergy has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.