It has been about a month since the last earnings report for CenterPoint Energy, Inc. (CNP - Free Report) . Shares have added about 3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is CNP 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 drivers.
CenterPoint Energy Tops Q1 Earnings, Sales Up Y/Y
CenterPoint Energy reported first-quarter 2018 adjusted earnings of 55 cents per share, which beat the Zacks Consensus Estimate of 44 cents by 25%. Earnings improved 48.6% from the year-ago quarter’s 37 cents.
Excluding one-time items, the company reported earnings per share of 38 cents, compared with 44 cents in the year-ago quarter.
Total revenues in the reported quarter were $3,155 million, which surpassed the Zacks Consensus Estimate of $2,752 million by 14.6%. Revenues were also 15.4% higher than $2,735 million reported a year ago.
The top-line beat was driven by higher contribution from Natural Gas Distribution, Energy Services as well as Electric Transmission & Distribution segments.
Total expenses in the quarter increased 18.8% year over year to $2,904 million.
Consequently, operating income declined 13.7% to $251 million from $291 million a year ago.
Interest and other finance charges remained flat at $78 million in the reported quarter, when compared to the year-ago quarter’s figure.
The Electric Transmission & Distribution segment reported operating income of $115 million in the first quarter, compared with $86 million in the year-ago quarter.
The Natural Gas Distribution segment reported operating income of $156 million, compared with $168 million in the year-earlier quarter.
The Energy Services segment reported adjusted operating income of $54 million in the first quarter, compared with $20 million in the year-ago quarter.
As of Mar 31, 2018, CenterPoint Energy had cash and cash equivalents of $219 million, down from $260 million as of Dec 31, 2017.
Total long-term debt was $8,176 million as of Mar 31, 2018, compared with $8,195 million as of Dec 31, 2017.
At the end of first-quarter 2018, the company’s net cash from operating activities was $484 million, compared with $317 million a year ago.
Total capital expenditure was $323 million at quarter-end, compared with $298 million in the year-ago quarter.
CenterPoint Energy currently expects to generate earnings in the high end of its previously guided range of $1.50-$1.60.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter.
CenterPoint Energy, Inc. Price and Consensus
At this time, CNP has an average Growth Score of C, however its Momentum is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Interestingly, CNP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.