It has been about a month since the last earnings report for WEC Energy Group (
WEC Quick Quote WEC - Free Report) . Shares have lost about 9.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is WEC 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 its most recent earnings report in order to get a better handle on the important catalysts.
WEC Energy Q1 Earnings Surpass Estimates, Sales Lag WEC Energy Group reported first-quarter 2023 earnings of $1.61 per share, which beat the Zacks Consensus Estimate of $1.59 by 1.26%. However, the bottom line declined 10.1% from the year-ago quarter’s figure of $1.79. Revenues
Operating revenues of $2,888.1 million missed the Zacks Consensus Estimate of $2,916 million by around 0.97%. The top line also declined 0.69% from $2,908.1 million in the year-ago quarter.
Highlights of the Release
Electricity consumption by small commercial and industrial customers declined 3.4% year over year. The same for large commercial and industrial customers, excluding the iron ore mine, decreased 3.9% on a year-over-year basis.
On a weather-normal basis, retail deliveries of electricity, excluding the iron ore mine, declined 1.9%. Total operating expenses amounted to $2,218.8 million, up 16.2% from the year-ago quarter’s $2,176.7 million. This was due to higher operation and maintenance expenses, depreciation & amortization costs, and property and revenue taxes. Operating income was $669.3 million, down 8.5% from the year-ago quarter’s $731.4 million. The company incurred an interest expense of $172.2 million, up 46.4% from the prior-year quarter’s $117.6 million. Financial Position
As of Mar 31, 2023, WEC had cash and cash equivalents of $35.7 million compared with $28.9 million as of Dec 31, 2022.
As of Mar 31, 2023, the company had a long-term debt of $15,827.3 million compared with $14,766.2 million as of Dec 31, 2022. Net cash provided by operating activities during first three months of 2023 was $796.1 million compared with $1,076.8 million in the year-ago period. Guidance
WEC Energy Group reaffirmed 2023 earnings guidance in the range of $4.58-$4.62 per share. The midpoint of the range, $4.60 per share, is on par with the Zacks Consensus Estimate.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -11.84% due to these changes.
Currently, WEC Energy has a nice Growth Score of B, though it is lagging a lot 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, WEC Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.