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Why Is Eversource (ES) Up 6.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for Eversource Energy (ES - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Eversource due for a pullback? 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.
Eversource Q3 Earnings and Revenues Miss Estimates
Eversource Energy reported third-quarter 2023 adjusted earnings of 97 cents per share, which missed the Zacks Consensus Estimate of 99 cents by 2%. The bottom line declined 4% year over year.
Total Revenues
ES’ third-quarter revenues of $2,791.5 million missed the Zacks Consensus Estimate of $3,334 million by 16.3%. Total revenues also declined 13.2% from the year-ago quarter’s figure of $3,215.6 million.
Highlights of the Release
Total operating expenses decreased 14.9% year over year to $2,260.9 million.
Operating income decreased 4.8% from the prior-year quarter’s level to $530.6 million. Interest expenses increased 24.7% to $222.3 million.
Net income in the quarter under review was $341.5 million, down 2.8% from $351.3 million recorded in the year-ago period.
Segmental Performance
Electric Transmission: Earnings from this segment totaled $160.3 million, up 2.9% from the prior-year quarter’s level. The increase was primarily due to a higher level of investment in Eversource’s electric transmission system.
Electric Distribution: Earnings from this segment amounted to $173.3 million, down 23% year over year. This was due to the timing impact of a rate design change for Eversource’s Massachusetts electric business that has the effect of shifting certain peak demand revenues from summer to winter.
Natural Gas Distribution: This segment reported a loss of $33.7 million, wider than the prior-year quarter’s registered loss of $24.6 million. This was due to higher depreciation and operations and maintenance expenses.
Water Distribution: Earnings from this segment amounted to $16.6 million, down 0.6% from the year-ago quarter’s figure.
Eversource Parent & Other Companies: The segment reported earnings of $23.2 million in third-quarter 2023, marking an improvement from the year-ago quarter's reported loss of $21.4 million. This primarily reflects a lower effective tax rate, partially offset by higher interest expense.
Guidance
Eversource narrowed its 2023 earnings expectation to the band of $4.30-$4.43 per share from the previously guided range of $4.25-$4.43. The mid-point of the revised guidance is $4.37, a bit higher than the Zacks Consensus Estimate of $4.36.
The company reaffirmed its expectations for long-term EPS growth rate from the existing core regulated businesses in the upper half of 5-7% through 2027, using the $4.09 earned in 2022 as a base.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Eversource has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. 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 these revisions looks promising. Notably, Eversource 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
Eversource is part of the Zacks Utility - Electric Power industry. Over the past month, Xcel Energy (XEL - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Xcel reported revenues of $3.66 billion in the last reported quarter, representing a year-over-year change of -10.3%. EPS of $1.23 for the same period compares with $1.18 a year ago.
For the current quarter, Xcel is expected to post earnings of $0.84 per share, indicating a change of +21.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.2% over the last 30 days.
Xcel has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Eversource (ES) Up 6.8% Since Last Earnings Report?
A month has gone by since the last earnings report for Eversource Energy (ES - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Eversource due for a pullback? 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.
Eversource Q3 Earnings and Revenues Miss Estimates
Eversource Energy reported third-quarter 2023 adjusted earnings of 97 cents per share, which missed the Zacks Consensus Estimate of 99 cents by 2%. The bottom line declined 4% year over year.
Total Revenues
ES’ third-quarter revenues of $2,791.5 million missed the Zacks Consensus Estimate of $3,334 million by 16.3%. Total revenues also declined 13.2% from the year-ago quarter’s figure of $3,215.6 million.
Highlights of the Release
Total operating expenses decreased 14.9% year over year to $2,260.9 million.
Operating income decreased 4.8% from the prior-year quarter’s level to $530.6 million. Interest expenses increased 24.7% to $222.3 million.
Net income in the quarter under review was $341.5 million, down 2.8% from $351.3 million recorded in the year-ago period.
Segmental Performance
Electric Transmission: Earnings from this segment totaled $160.3 million, up 2.9% from the prior-year quarter’s level. The increase was primarily due to a higher level of investment in Eversource’s electric transmission system.
Electric Distribution: Earnings from this segment amounted to $173.3 million, down 23% year over year. This was due to the timing impact of a rate design change for Eversource’s Massachusetts electric business that has the effect of shifting certain peak demand revenues from summer to winter.
Natural Gas Distribution: This segment reported a loss of $33.7 million, wider than the prior-year quarter’s registered loss of $24.6 million. This was due to higher depreciation and operations and maintenance expenses.
Water Distribution: Earnings from this segment amounted to $16.6 million, down 0.6% from the year-ago quarter’s figure.
Eversource Parent & Other Companies: The segment reported earnings of $23.2 million in third-quarter 2023, marking an improvement from the year-ago quarter's reported loss of $21.4 million. This primarily reflects a lower effective tax rate, partially offset by higher interest expense.
Guidance
Eversource narrowed its 2023 earnings expectation to the band of $4.30-$4.43 per share from the previously guided range of $4.25-$4.43. The mid-point of the revised guidance is $4.37, a bit higher than the Zacks Consensus Estimate of $4.36.
The company reaffirmed its expectations for long-term EPS growth rate from the existing core regulated businesses in the upper half of 5-7% through 2027, using the $4.09 earned in 2022 as a base.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Eversource has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. 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 these revisions looks promising. Notably, Eversource 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
Eversource is part of the Zacks Utility - Electric Power industry. Over the past month, Xcel Energy (XEL - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Xcel reported revenues of $3.66 billion in the last reported quarter, representing a year-over-year change of -10.3%. EPS of $1.23 for the same period compares with $1.18 a year ago.
For the current quarter, Xcel is expected to post earnings of $0.84 per share, indicating a change of +21.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +4.2% over the last 30 days.
Xcel has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.