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NiSource (NI) Up 7.2% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for NiSource (NI - Free Report) . Shares have added about 7.2% in that time frame, outperforming 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 the most recent earnings report in order to get a better handle on the important catalysts.

NiSource Earnings Miss Estimates, Revenues Beat in Q1

NiSource Inc. reported first-quarter 2022 operating earnings per share (EPS) of 75 cents, which lagged the Zacks Consensus Estimate by a penny. The bottom line also declined 2.6% from the year-ago quarter’s earnings of 77 cents per share.

On a GAAP basis, NiSource reported first-quarter 2022 EPS of 94 cents, up 30.6% from 72 cents in the year-ago quarter.

Total Revenues

Operating revenues of $1,873.3 million surpassed the Zacks Consensus Estimate of $1,872 million by 0.06%. The top line improved 21.2% from $1,545.6 million in the prior-year quarter.

Highlights of the Release

Total operating expenses for the first quarter amounted to $1,273 million, up 14.4% from the year-ago quarter’s $1112.4 million, due to the higher cost of energy, operating and maintenance trackers and taxes.

Operating income was $600.3 million, up 38.6% from the year-ago figure of $433.2 million.

Net interest expenses in the reported quarter were down 1.1% from the prior-year quarter’s figure to $83.7 million.

Financial Update

NiSource's cash and cash equivalents as of Mar 31, 2022 were $114.5 million, up from $84.2 million as of Dec 31, 2021.

Long-term debts (excluding amounts due within a year) as of Mar 31, 2022 were $9,179.8 million compared with $9,183.4 million as of Dec 31, 2021.

Net cash flows from operating activities in first three months of 2022 were $579.8 million compared with $448.3 million in first three months of 2021.

Guidance

NiSource reiterated the 2022 non-GAAP net operating earnings guidance in the range of $1.42-$1.48 per share and expects earnings to witness a CAGR of 7-9% from 2021 through 2024, including a near-term annual growth rate of 5-7% through 2023.

NiSource plans to make capital investments of nearly $10 billion during the 2021-2024 period. From 2022, through 2024, NiSource plans to invest $2 billion in renewable projects.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, NiSource has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, 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 has been net zero. Notably, NiSource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

NiSource is part of the Zacks Utility - Electric Power industry. Over the past month, DTE Energy (DTE - Free Report) , a stock from the same industry, has gained 3.1%. The company reported its results for the quarter ended March 2022 more than a month ago.

DTE Energy reported revenues of $4.58 billion in the last reported quarter, representing a year-over-year change of +21.2%. EPS of $2.31 for the same period compares with $2.44 a year ago.

DTE Energy is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -35.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.5%.

DTE Energy has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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