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Clearway Energy (CWEN) Down 1.8% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Clearway Energy (CWEN - Free Report) . Shares have lost about 1.8% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Clearway Energy due for a breakout? 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.

Clearway Energy Q2 Earnings & Revenues Miss Estimates

Clearway Energy recorded a second-quarter 2022 loss of $3.86 per share against the Zacks Consensus Estimate of earnings of 38 cents.

Revenues

Operating revenues of $368 million missed the Zacks Consensus Estimate of $389 million by 5.4%. The top line also decreased by 3.2% from $380 million in the prior-year quarter.

Highlights of the Release

Total operating expenses amounted to $253 million, up 2.4% from the year-ago figure of $247 million due to an increase in operational costs.

Operating income was $1,406 million, up 957.1% from the year-ago figure of $133 million.

In the second quarter, CWEN reported interest expenses of $47 million, down 54.4% year over year.

On May 1, 2022, Clearway Energy completed the sale of 100% of its interests in the Thermal Business to KKR for net proceeds of nearly $1.46 billion. The Thermal disposition resulted in a gain of $1.29 billion. The proceeds from the sale were utilized to repay temporary cash borrowings. On Jun 23, 2022, CWEN entered into a binding agreement to acquire the 413-megawatt portfolio of operating wind projects from Capistrano Wind Partners.

Financial Position

Clearway Energy had cash and cash equivalents of $955 million as of Jun 30, 2022, up from $179 million as of Dec 31, 2021.

Total liquidity as of Jun 30, 2022 was $1,696 million, up 106.6% from the Dec 31, 2021 level of $821 million.

The long-term debt as of Jun 30, 2022 was $6,605 million compared with $6,939 million as of Dec 31, 2021.

Clearway Energy’s net cash provided by operating activities for the first six months of 2022 was $279 million compared with $241 million in the year-ago period.

Guidance

Clearway Energy reaffirmed its 2022 CAFD guidance of $365 million due to closing the sale of Clearway's Thermal Business. CWEN is also increasing its pro forma CAFD outlook expectations to nearly $400 million from $385 million. The company expects its 2022 EBITDA guidance of $1,225 million.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -76.88% due to these changes.

VGM Scores

Currently, 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

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Clearway Energy 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

Clearway Energy belongs to the Zacks Alternative Energy - Other industry. Another stock from the same industry, NextEra Energy Partners (NEP - Free Report) , has gained 2.2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

NextEra Energy Partners reported revenues of $362 million in the last reported quarter, representing a year-over-year change of +43.1%. EPS of $2.61 for the same period compares with -$0.97 a year ago.

NextEra Energy Partners is expected to post earnings of $0.65 per share for the current quarter, representing a year-over-year change of +170.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -9.4%.

NextEra Energy Partners 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.


In-Depth Zacks Research for the Tickers Above


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