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Avangrid (AGR) Down 7.6% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Avangrid (AGR - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Avangrid due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AVANGRID's Q4 Earnings In Line, Revenues Beat Estimates

AVANGRID, Inc. reported fourth-quarter 2022 earnings of 39 cents per share, which were on par with the Zacks Consensus Estimate. The bottom line declined 11.4% from the year-ago figure of 44 cents per share.

GAAP earnings for the fourth-quarter were 38 cents per share, down 9.5% from the prior-year quarter’s 42 cents.

AGR reported full-year 2022 earnings of $2.33 per share, up 6.9% from the previous year’s $2.18.

Total Revenues

Total operating revenues for the fourth-quarter were $2,158 million, surpassing the Zacks Consensus Estimate of $1,866 million by 15.6%. Revenues also increased 11.64% from $1,933 million reported in the comparable period of 2021.

Revenues for 2022 totaled $7,923 million, up 13.6% from the previous year’s $6,974 million.

Highlights of the Release

Total operating expenses for the fourth quarter were $1,941 million, up 13.3% from the year-ago quarter’s $1,713 million. This increase was due to higher purchase power costs and an increase in operating expenses.

Operating income was $217 million, down 1.4% from $220 million in the year-ago reported quarter.

Adjusted net income was $152 million, down 11.1% from $171 million in the year-ago reported quarter.

Segmental Details

Networks reported adjusted net income of $157 million in the fourth quarter, down 19.1% from $194 million in the year-ago quarter.

Renewables reported net income of $81 million, up 775% from a $12 million loss in the year-ago quarter.

Corporate and Others reported net loss of $86 million, wider than $11 million in the year-ago quarter.

Guidance

AVANGRID affirmed the 2023 adjusted net income and EPS guidance at $850-$915 million and $2.20-$2.35, respectively, taking into consideration 386.7 million average shares outstanding. The Zacks Consensus Estimate for earnings of $2.25 per share is a tad lower than the mid-point of the company’s guided range.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Avangrid has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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 this revision looks promising. It's no surprise Avangrid has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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