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Why Is Dominion Resources (D) Up 5.3% Since the Last Earnings Report?

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It has been about a month since the last earnings report for Dominion Resources, Inc. (D - Free Report) . Shares have added about 5.3% 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 of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Dominion Resources Beats on Q1 Earnings and Revenues

Dominion Resources reported first-quarter 2017 operating earnings of $0.97 per share, beating the Zacks Consensus Estimate of $0.96 by $0.01. Earnings were within management’s guidance range of $0.90 to $1.10 per share.

Operating earnings also increased 1.04% from $0.96 earned a year ago. The year-over-year increase is primarily due to higher revenues from regulated growth projects, lower electric capacity expense and the addition of Dominion Questar.

GAAP earnings were $1.01 per share compared with $0.88 in the year-ago quarter. The difference between GAAP and operating earnings was due to investments in nuclear decommissioning trust funds.

Total Revenue

Dominion’s total revenue came in at $3,384 million, beating the Zacks Consensus Estimate of $3,336 million by 1.4%. Quarterly revenues were also up 15.8% year over year.

Highlights of the Release

Total operating expenses increased 10.8% year over year to $2,259 million primarily due to a 156.3% surge in purchased gas prices.

Interest and related charges in the reported quarter were $292 million, up 29.2% from the year-ago quarter.

In the reported quarter, Dominion Virginia Power’s electric customer base increased by 24,832 from the prior-year quarter.  Due to a mild weather condition, total electricity sales volumes dropped 3.1% to 20,527 Gigawatt per hour (Gwh).

Segment Update

Dominion Virginia Power recorded net income of $125 million or $0.20 per share in first-quarter 2017.

Dominion Energy recorded earnings of $263 million or $0.42 per share in the reported quarter.

Dominion Generation’s earnings were $261 million or $0.41 per share.

Corporate and Others incurred a loss of $38 million or $0.06.

Financial Update

Dominion exited first-quarter 2017 with cash and cash equivalents of $486 million, up from $261 million as of Dec 31 2016.

Long-term debt as of Mar 31, 2017 was $31.1 billion compared with $30.2 billion at the end of 2016.

Cash from operating activities in first-quarter 2017 was $1.36 billion, up 14.3% from $1.19 billion in the year-ago period.

Looking Ahead

In second-quarter 2017, Dominion expects to generate operating earnings of $0.60–$0.70 per share compared with $0.71 earned in second-quarter 2016.

For the full year, Dominion reiterated its earnings guidance in the range of $3.40–$3.90 per share.

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.

Dominion Resources, Inc. Price and Consensus

VGM Scores

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

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

The Zacks Consensus Estimate for the current quarter moved up over the last 30 days. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.


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