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Why Is PPL (PPL) Up 6.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for PPL (PPL - Free Report) . Shares have added about 6.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PPL 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 drivers.

PPL Q4 Earnings Fall Shy of Estimates, Revenues Decline Y/Y

PPL Corp. reported fourth-quarter 2020 adjusted earnings per share of 59 cents, which missed the Zacks Consensus Estimate of 61 cents by 3.3%. However, the bottom line improved 4% year over year.

On a GAAP basis, the company generated earnings per share of 38 cents compared with 48 cents in the year-ago quarter.

Total Revenues

PPL Corp. posted revenues of $1,929 million for the fourth quarter, which dipped 1.3% year over year.

Operational Highlights

PPL Corp.’s total operating expenses fell 2.9% year over year to $1,225 million for the reported quarter.

The company reported operating income of $704 million, up 1.6% from the prior-year quarter.

Interest expenses were up 1.2% to $251 million from the year-ago quarter’s $248 million.

Segment Results

U.K. Regulated: Adjusted earnings dipped 2.9% from the prior-year quarter to 34 cents per share.

Kentucky Regulated: Adjusted earnings were 11 cents per share, up 10% from the year-ago figure.  

Pennsylvania Regulated: Adjusted earnings of 16 cents per share were in line with the prior-year number.

Corporate and Other: The segment reported a loss of 2 cents for the quarter, narrower than a loss of 4 cents in the prior-year quarter.

Financial Position

As of Dec 31, 2020, the company had cash and cash equivalents of $708 million compared with $815 million on Dec 31, 2019.

Long-term debt (excluding debts due within a year) was $21,553 million as of Dec 31 compared with $20,721 million at 2019 end.

Net cash provided by operating activities in 2020 was $2,746 million compared with $2,427 million in 2019.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, PPL has a poor Growth Score of F, however its Momentum Score is doing a lot 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 top 40% 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 looks promising. Notably, PPL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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