It has been about a month since the last earnings report for NiSource (NI Quick QuoteNI - Free Report) . Shares have lost about 0.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is NiSource 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 drivers.

NiSource Q2 Earnings Miss Estimates, Revenues Fall Y/Y

NiSource Inc. reported second-quarter 2023 operating earnings per share (EPS) of 11 cents, which missed the Zacks Consensus Estimate of 13 cents by 15.4%. The bottom line declined 8.3% from the year-ago quarter’s recorded figure of 12 cents.

On a GAAP basis, the company reported EPS of 9 cents compared with 12 cents in the prior-year period.

Total Revenues

Operating revenues of $1,090 million missed the Zacks Consensus Estimate of $1,157 million by 5.8%. The top line also decreased 7.9% from the prior-year quarter’s figure of $1,183.2 million.

Highlights of the Release

Total operating expenses in the quarter amounted to $921.1 million, down 11.4% from the year-ago quarter’s level of $1,039.9 million due to lower energy costs. Our model predicted total operating expenses of $964.4 million for the same quarter.

Operating income totaled $168.9 million, up 17.9% from the prior-year period’s figure of $143.3 million.

Net interest expenses amounted to $110.5 million, up 30.8% from the prior-year quarter’s figure of $84.5 million. Our model predicted net interest expenses of $109.5 million for the same quarter.

Total gas distribution in Sales and Transportation was recorded at 194.1 Million British Thermal Units per day (MMDth) while our model predicted the same at 189.4 MMDth.

Total electric sales were recorded at 3,628.7 gigawatt-hour (GWh) while our model projected the same at 3,706.5 GWh.

Financial Update

NiSource's cash and cash equivalents as of Jun 30, 2023, were $151.3 million compared with $40.8 million as of Dec 31, 2022. The company had $1.8 billion in net available liquidity as of Jun 30, 2023.

Long-term debts (excluding those due within a year) as of Jun 30, 2023, were $11,002.8 million compared with $9,523.6 million as of Dec 31, 2022.

Net cash flows from operating activities in the first six months of 2023 were $1,191 million compared with $907.2 million in the year-ago period.

Guidance

NiSource reaffirmed its 2023 non-GAAP net operating earnings guidance in the range of $1.54-$1.60 per share. It now expects earnings to be toward the upper end of the range. The Zacks Consensus Estimate for the same is pegged at $1.59 per share, which is higher than the midpoint of the company’s guided range. NI expects to witness an earnings CAGR of 6-8% through 2027.

It also projects an investment of $15 billion during 2023-2027.

 

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, NiSource has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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 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.