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Pacific Gas & Electric (PCG) Down 2.3% Since Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Pacific Gas & Electric Co. (PCG - Free Report) . Shares have lost about 2.3% in that time frame.

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

PG&E Falls Short of Earnings & Revenue Estimates in Q1

PG&E Corporation reported adjusted operating earnings per share of 91 cents in first-quarter 2018, which missed the Zacks Consensus Estimate of $1.03 by 11.7%. Earnings were also down 14.2% from $1.06 in the year-ago quarter.

GAAP earnings during the reported quarter were 86 cents per share, down from $1.13 in the prior-year quarter.

Revenue Update

PG&E’s total revenues of $4,056 million missed the Zacks Consensus Estimate of $4,233 million by 4.2%. The top line declined 5% from the year-ago quarter’s level.

Electric revenues were down 3.7% from the prior-year quarter’s tally and natural gas revenues declined 8.1% year over year.

Operational Highlights

Total operating expenses as of Mar 31, 2018 were $3,457 million, down 1.6% from $3,401 million as of Mar 31, 2017. Costs declined due to lower cost of electricity as well as cost of natural gas.

Operating income as of Mar 31, 2018 came in at $599 million, down from $867 million of Mar 31, 2017.

Interest expenses in first-quarter 2018 were $220 million, compared with $218 million in the year-ago period.

Guidance

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

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

Pacific Gas & Electric Co. Price and Consensus

 

VGM Scores

At this time, PCG has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile 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.

Our style scores indicate that the stock is more suitable for value investors than growth investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, 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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