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Pacific Gas & Electric (PCG) Up 9.9% Since Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Pacific Gas & Electric Co. (PCG - Free Report) . Shares have added about 9.9% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is PCG 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.

PG&E Corp Earnings Trail Estimates in Q4, Decline Y/Y

PG&E Corporation’s adjusted operating earnings per share of 63 cents in fourth-quarter 2017 missed the Zacks Consensus Estimate of 69 cents by 8.7%. Earnings were also down 52.6% from $1.33 reported in the year-ago quarter.

The downside in adjusted earnings was caused by the timing of the 2015 GT&S rate case, which delayed recognition of the full 2016 revenue increase until the fourth quarter of 2016.

GAAP earnings during the quarter were 22 cents per share, compared with $1.36 a year ago.

For 2017, the company reported adjusted operating earnings per share of $3.68 that missed the Zacks Consensus Estimate of $3.69 by a penny. Earnings were also down 2.1% from $3.76 reported in the prior year.

Revenue Update

For 2017, the company reported revenues of $17.14 billion, down 3% from $17.67 billion in the prior year. The figure came in line with the Zacks Consensus Estimate of $17.67 billion.

Electric revenues were down 5.3% from the year-ago levels, while natural gas revenues rose 5.5%.

Operational Highlights

Total operating expenses in 2017 were $14,179 million, down 8.5% from $15,489 million in 2016. Costs declined due to lower cost of electricity as well as operating and maintenance expenses.

Operating income in 2017 came in at $2,956 million, up from $2,177 million in 2016.

Interest expenses in 2017 were $888 million, compared with $829 million in the previous year.

Guidance

PG&E Corp has not provided its guidance for 2018 GAAP earnings and adjusted earnings from operations due to the uncertainty related to the October 2017 Northern California wildfires.

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.

VGM Scores

Currently, PCG has a subpar Growth Score of D. Its Momentum is doing a bit better with a C. The stock was allocated a grade of B on the value side, putting it in the second quintile 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 value investors than momentum investors.

Outlook

PCG has a Zacks Rank # 3 (Hold). We expect an in-line return from the stock in the next few months.


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