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Why Is Enbridge (ENB) Down 8.7% Since its Last Earnings Report?
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It has been about a month since the last earnings report for Enbridge Inc (ENB - Free Report) . Shares have lost about 8.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is ENB due for a breakout? 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.
Fourth-Quarter 2017 Results
Enbridge reported strong fourth-quarter 2017 results, courtesy of higher liquid delivery volumes from the Canadian Mainline and Wood Buffalo Extension Pipeline. Higher natural gas processing volumes, lower expenses and contributions from new projects led to the encouraging numbers.
Earnings per share were 48 cents, which beat the Zacks Consensus Estimate and the year-ago quarter’s figure, both of which were 42 cents.
Total revenues in the quarter rose 45% year over year to $10,149 million. The top line also surpassed the Zacks Consensus Estimate of $9,385 million.
Segment Analysis
Liquids Pipelines: Adjusted operating income in this segment was C$1,482 million, up 9.4% from C$1,355 million in the year-ago quarter. Higher delivery of liquids from the Canadian Mainline and Wood Buffalo Extension Pipeline led to the improvement.
Gas Pipelines and Processing: The segment reported earnings of C$1,020 million, skyrocketing from C$166 million recorded in fourth-quarter 2016. Higher contributions from expansion projects commissioned in 2016 and 2017 along with Spectra assets drove the upside.
Gas Distribution: This business unit reported profit of C$450 million, up more than 89% from C$238 million recorded in the October-December 2016 quarter. The upside was mainly due to the acquisition of the Union Gas, which benefited from higher contributions from the Dawn-Parkway expansion projects, improved storage optimization and increases in delivery rates.
Green Power and Transmission: This segment delivered earnings of C$109 million, which increased from C$91 million recorded in the prior-year quarter.
Energy Services: This segment reported loss of C$21 million, wider than a loss of C$4 million in fourth-quarter 2016.
Outlook
The company expects to initiate online secured growth projects worth $22 billion through 2020. Enbridge increased the dividend by 10% for 2018 and expects annual dividend per share at a CAGR of 10% through 2020. Considering the stable and improving business, Enbridge expects 2018 DCF between $4.15 and $4.45 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, ENB has an average Growth Score of C, however its Momentum is doing a bit better with a B. However, 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 momentum investors than growth investors.
Outlook
ENB has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Enbridge (ENB) Down 8.7% Since its Last Earnings Report?
It has been about a month since the last earnings report for Enbridge Inc (ENB - Free Report) . Shares have lost about 8.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is ENB due for a breakout? 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.
Fourth-Quarter 2017 Results
Enbridge reported strong fourth-quarter 2017 results, courtesy of higher liquid delivery volumes from the Canadian Mainline and Wood Buffalo Extension Pipeline. Higher natural gas processing volumes, lower expenses and contributions from new projects led to the encouraging numbers.
Earnings per share were 48 cents, which beat the Zacks Consensus Estimate and the year-ago quarter’s figure, both of which were 42 cents.
Total revenues in the quarter rose 45% year over year to $10,149 million. The top line also surpassed the Zacks Consensus Estimate of $9,385 million.
Segment Analysis
Liquids Pipelines: Adjusted operating income in this segment was C$1,482 million, up 9.4% from C$1,355 million in the year-ago quarter. Higher delivery of liquids from the Canadian Mainline and Wood Buffalo Extension Pipeline led to the improvement.
Gas Pipelines and Processing: The segment reported earnings of C$1,020 million, skyrocketing from C$166 million recorded in fourth-quarter 2016. Higher contributions from expansion projects commissioned in 2016 and 2017 along with Spectra assets drove the upside.
Gas Distribution: This business unit reported profit of C$450 million, up more than 89% from C$238 million recorded in the October-December 2016 quarter. The upside was mainly due to the acquisition of the Union Gas, which benefited from higher contributions from the Dawn-Parkway expansion projects, improved storage optimization and increases in delivery rates.
Green Power and Transmission: This segment delivered earnings of C$109 million, which increased from C$91 million recorded in the prior-year quarter.
Energy Services: This segment reported loss of C$21 million, wider than a loss of C$4 million in fourth-quarter 2016.
Outlook
The company expects to initiate online secured growth projects worth $22 billion through 2020. Enbridge increased the dividend by 10% for 2018 and expects annual dividend per share at a CAGR of 10% through 2020. Considering the stable and improving business, Enbridge expects 2018 DCF between $4.15 and $4.45 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Enbridge Inc Price and Consensus
Enbridge Inc Price and Consensus | Enbridge Inc Quote
VGM Scores
At this time, ENB has an average Growth Score of C, however its Momentum is doing a bit better with a B. However, 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 momentum investors than growth investors.
Outlook
ENB has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.