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Eversource Energy (ES) Up 3.7% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Eversource Energy (ES - Free Report) . Shares have added about 3.7% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 Misses Q4 Earnings and Revenue Estimates

Eversource Energy reported fourth-quarter 2016 operating earnings of $0.72 per share lagging the Zacks Consensus Estimate of $0.75 by 4.0%. However, the quarterly earnings were up 26.3% from the year-ago quarter figure of $0.57.

Total Revenue

Eversource’s fourth-quarter revenues of $1,777 million missed the Zacks Consensus Estimate of $1,971 million by 9.8% and improved 5.1% from the year-ago tally of $1,691.2 million.

The full-year 2016 total revenue was $7,639.1 million down 3.96% from 2015 levels.

Highlights of the Release

In the reported quarter total electric distribution increased by 1.9% year over year to 12,676 Gigawatt hours, while natural gas distribution increased by 22.1% to 29,935 million cubic feet of gas.

Operating expenses increased nearly 2.5% year over year to $1,338.6 million primarily on the back of higher energy efficiency expenses and higher taxes.

Operating income was up 13.7% to $438.1 million from $385.4 million a year ago.

In the reported quarter, interest expense was $102.4 million, up 10.3% year over year.

Net income in the reported quarter was $229.2 million, up 26.1% year over year.

Segmental Performance

Electric Distribution:
Segment earnings were down 7.8% to $81.5 million primarily due to the absence of positive regulatory items in 2016 which were recorded in 2015.

Electric Transmission: Segment earnings surged 31.1% to $104.2 million backed by higher investment in transmission facilities.

Natural Gas Distribution: Segment earnings soared 73.1% to $25.8 million. The year-over-year earnings were driven primarily by colder, more seasonable temperatures in 2016, compared with the record warm weather of Dec 2015.

Other & Elimination: The segment earned $17.7 million, while in the year-ago period, it had incurred a loss of $1.0 million.

Guidance

Eversource expects 2017 earnings per share in the range of $3.05–$3.20. Long-term earnings growth is projected to be in the range of 5–7% through 2020 considering 2016 earnings as base.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

Eversource Energy Price and Consensus

 

Eversource Energy Price and Consensus | Eversource Energy Quote

VGM Scores

Currently, Eversource Energy's stock has a subpar Growth Score of 'D', however its Momentum is doing a bit better with a 'C'. 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.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.


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