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DTE Energy (DTE) Up 4.4% Since Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for DTE Energy Company (DTE - Free Report) . Shares have added about 4.4% 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 the most recent earnings report in order to get a better handle on the important catalysts.

DTE Energy Tops on Q2 Earnings, Raises '17 Outlook

DTE Energy reported second-quarter 2017 operating earnings per share (EPS) of $1.07, which surpassed the Zacks Consensus Estimate of $0.97 by a dime. Operating earnings also grew 9.2% from the year-ago figure of $0.98.

On a GAAP basis, reported earnings came in at $0.99 per share, compared with $0.84 in the prior-year quarter. The variance between GAAP and pro forma earnings was due to certain non-recurring items, mark-to-market adjustments and discontinued operations.

Total Revenue

Total revenue came in at $2.86 billion, which surpassed the Zacks Consensus Estimate of $2.31 billion by 23.8%. Reported revenues also increased 26.2% from the year-ago figure of $2.26 billion on account of higher contribution from non-utility operations.

Operating Update

Operation and maintenance expenses in the reported quarter were $559 million, up 3.1% year over year.

Total operating expenses increased 27.2% to $2.56 billion. This was primarily owing to higher fuel, purchased power and gas expenses at non-utility (74.1%), depreciation and amortization (2.5%) and taxes on other income (6.6%).

Operating income increased 18.4% to $303 million.

Segmental Highlights

Utility Operations

DTE Electric:  The segment’s operating earnings were $148 million, up 9.6% year over year.

DTE Gas: The segment reported operating income of $1 million, down 92.3% year over year.

Non-Utility Operations

Gas Storage and Pipelines: The segment generated profits of $40 million, up from $35 million a year ago.

Power and Industrial Projects: The segment posted operating profits of $30 million, up from $17 million in the prior-year quarter.

Corporate and Other: The segment reported operating income of $4 million.

Guidance

DTE Energy raised its 2017 guidance that was issued in November. The company expects to generate operating earnings in the range of $5.26–$5.57 per share in 2017, compared with the year-ago guidance of $5.15–$5.46.

How Have Estimates Been Moving Since Then?

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

DTE Energy Company Price and Consensus

 

VGM Scores

At this time, the stock has a poor Growth Score of F, however its Momentum is doing a lot better with a B. Following a similar course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is more suitable for momentum investors than value investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.




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