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Clearway Energy (CWEN) Up 5.4% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Clearway Energy (CWEN - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.

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

Clearway Energy Q2 Earnings Lag Estimates, Sales Beat

Clearway Energy Inc. reported second-quarter 2021 earnings of 30 cents per share, which lagged the Zacks Consensus Estimate of 42 cents by 28.6%. Earnings were down 26.8% from the prior-year quarter.

Revenues

The company's total revenues for second-quarter 2021 were $380 million, which surpassed the Zacks Consensus Estimate of $371 million by 2.4%. Total revenues also improved 15.5% year over year.

Highlights of the Release

Total operating expenses for second-quarter 2021 amounted to $247 million, increasing 24.1% year over year. Operating income was $133 million, up 2.3% year over year.

Interest expenses for the quarter were $103 million, up 10.8% year over year.

The company’s board of directors approved a 1.7% increase in quarterly dividend rate to 33.45 cents.  Clearway Energy is on course to achieve 5-8% annual dividend growth target over the long term.

The company continues to expand renewable assets through partnerships and acquisitions.

Financial Position

It had cash and cash equivalents of $138 million as of Jun 30, 2021, down from $268 million on Dec 31, 2020.
 
Total liquidity as of Jun 30, 2021 was $810 million, down from the Dec 31, 2020 level of $894 million. The decline was due to execution of growth investments and redemption of the 2025 Senior Notes. This was partially offset by the issuance of the 2031 Senior Notes.

Long-term debt as of Jun 30, 2021 was $7,434 million compared with $6,585 million on Dec 31, 2020.

The company's net cash flow from operating activities for first-half of 2021 was $241 million compared with $184 million in the year-ago period.

Guidance

Clearway Energy reaffirmed its 2021 cash available for distribution guidance of $325 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -7.55% due to these changes.

VGM Scores

At this time, Clearway Energy has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, 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

Clearway Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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