A month has gone by since the last earnings report for Public Service Enterprise Group Incorporated (PEG - Free Report) . Shares have added about 4.2% 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.
Public Service Enterprise Tops Q2 Earnings, Keeps View
Public Service Enterprisereported second-quarter 2017 adjusted operating earnings of $0.62 per share, which exceeded the Zacks Consensus Estimate of $0.57 by 8.8%. Earnings also improved 8.8% on a year-over-year basis.
Excluding one–time adjustments, the company reported quarterly earnings of $0.22 per share compared with $0.37 in the second-quarter 2016.
Revenues of $2,133 million in the quarter missed the Zacks Consensus Estimate of $2,333 million by 8.6%. However, the figure increased 12% from the year-ago figure of $1,905 million.
During the reported quarter, electric sales volume declined 0.8% to 9,583 million kilowatt-hours. But gas sales volume declined 18.1% to 692 million therms.
For electric sales, results reflected a 0.8% drop in the commercial and industrial sector, 0.6% decline in residential sector, 9.2% fall in street lighting and 2.3% drop in interdepartmental sector.
Total gas sales volume in the reported quarter declined on 24.5% drop in non-firm sales volume of gas and 9.8% decline in firm sales volume of gas.
Highlights of the Release
During the second quarter, the company incurred operating income of $374 million down from $1,174 million in the year-ago quarter. Total operating expenses were $4,351 million, up 30% from the year-ago quarter figure.
Interest expenses in the reported quarter were $189 million, in-line with the year-ago level.
PSE&G: Segment earnings were $507 million, up from $441 million in the prior-year quarter. Quarterly results reflect the continuing successful execution of its growth initiatives and control of operating expenses as well as the benefits of its expanded investment program.
PSEG Power: The segment suffered a loss of $267 million against earnings of $275 million a year ago. The downside was due to the impact of incremental depreciation and other expenses of $387 million, pre-tax, associated with the decision to retire the Hudson and Mercer coal/gas-fired generating stations announced on Jun 1, 2017.
PSEG Enterprise/Other: The segment incurred net loss of $17 million as against operating earnings of $36 million in the second quarter of 2016.
As of Jun 30, cash and cash equivalents were $430 million compared with $423 million as of Dec 31, 2016.
Long-term debt as of Jun 30 was $12,521 million, up from the 2016-end level of $11,395 million.
Public Service Enterprise Group generated $1,756 million in cash from operations in the first half of the year, up from the year-ago figure of $1,722.
The company maintained its 2017 guidance. Earnings are still projected in the range of $2.80–$3.00.
PSE&G’s operating earnings are still expected in the band of $945–$985 million. The company also reiterates PSEG Power operating earnings guidance at the $435–$510 million range.
PSEG Enterprise/Other’s operating earnings expectations are reaffirmed at $35 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, the stock has a poor Growth Score of F, however its Momentum is doing a bit better with a D. Meanwhile, 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 solely suitable for value investors.
While estimates have been moving upward, the magnitude of the revision is net zero. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.