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Hawaiian Electric (HE) Up 0.3% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Hawaiian Electric Industries, Inc. (HE - Free Report) . Shares have added about 0.3% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.

Hawaiian Electric Beats on Q1 Earnings, Keeps '17 View

Hawaiian Electric reported adjusted earnings per share (EPS) of $0.31 in the first quarter of 2017, which surpassed the Zacks Consensus Estimate of $0.29 by 6.9%. On a year-over-year basis, the figure was in line with the prior-year quarter level.

Total Revenue

Hawaiian Electric’s total revenue of $591.6 million in the reported quarter also surpassed the Zacks Consensus Estimate of $555 million by 6.6% and was up 7.4% year over year. The top line improved primarily due to higher contributions from Electric Utility, Bank and Other.

Operating Statistics

Total expenses were up 8.6% year over year to $523.7 million during the first quarter.

Total operating income was $67.9 million, down 1.4% mainly on lower contributions from Electric Utility.

Interest expenses amounted to $19.6 million, down from $20.1 million in the prior-year quarter.

Segment Details

Electric Utility: Segment revenues in the reported quarter were $518.6 million, up 7.6% year over year. Net income, however, declined 3.4% to $48.9 million from $55.3 million a year ago.

Banking: Segment revenues in the reported quarter were $72.9 million, up 5.8%. Net income came in at $24.2 million, up 23.3%.

Other: Segment revenues in the reported quarter were $0.1 million, up 39.7% year over year. However, it reported a quarterly net loss of approximately $5.2 million compared with the year-ago loss of $6.1 million.

Financial Update

Cash and cash equivalents as of Mar 31, 2017 were $234.2 million, down from $278.5 million as of Dec 31, 2016.

Long-term debt, net other than bank, at the end of first quarter was $1,618.7 million, down from $1,619 million at year-end 2016.

Guidance

Hawaiian Electric reaffirmed its 2017 adjusted EPS in the range of $1.55–$1.70 with EPS in the Electric Utility segment expected in the band of $1.17–$1.27 and that at the Banking segment in the range of $0.53–$0.56.

How Have Estimates Been Moving Since Then?

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

Hawaiian Electric Industries, Inc. Price and Consensus

 

VGM Scores

At this time, the stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. Charting a somewhat similar path, 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 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for value and growth investors than momentum investors.

Outlook

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


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