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Evergy (EVRG) Up 3.4% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Evergy Inc (EVRG - Free Report) . Shares have added about 3.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Evergy 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 drivers. <p style="text-align: justify;"><strong>Evergy Q2 Earnings In Line, Electric Sales Improve</strong><br /><br />Evergy, Inc.&nbsp; reported second-quarter 2018 operating earnings of 56 cents per share, in line with the Zacks Consensus Estimate. The bottom line was up 12% year over year.<br /><br />The company&rsquo;s second-quarter earnings include Westar&rsquo;s earnings for the full period, and KCP&amp;L and GMO&rsquo;s earnings beginning in June 2018. Comparison to 2017 earnings is based on Westar&rsquo;s earnings for that period.<br /><br />The year-over-year improvement is attributable to higher contribution from Westar retail sales, lower income tax expense, and the inclusion of KCP&amp;L and GMO earnings. These gains were offset by revenue reductions for customer bill credits incurred in June 2018 following the closure of the merger.<br /><br />Excluding merger-related costs, earnings in the second quarter of 2018 were 90 cents compared with 59 cents in the year-ago quarter.<br /><br /><strong>Total Revenues</strong><br /><br />Evergy&rsquo;s total revenues came in at $893.4 million, improving 46.6% year over year.<br /><br /><strong>Highlights of the Release</strong><br /><br />Total operating expenses increased 70.7% year over year to $766.5 million, due to higher fuel and purchased power, along with operation and maintenance expenses.<br /><br />Interest and related charges in the reported quarter were $58.4 million, up 33.6% from the year-ago quarter.<br /><br />During the quarter, the company sold 11,906-megawatt hour (MWh) of electric compared with 6,647 MWh in the year-ago quarter, driven by higher sales volume to all customer classes.<br /><br />Post the quarter-end, Evergy&rsquo;s Board of Directors authorized the repurchase of up to 60 million shares and this authorization does not have an expiry date. However, the company expects to repurchase shares within 2020.<br /><br />Net income in the reported quarter was $101.8 million, up 41.2% year over year.<br /><br /><strong>Financial Update</strong><br /><br />Cash and cash equivalents as of Jun 30, 2018 was $1,280.1 million compared with $3.4 million on Dec 31, 2017.<br /><br />Long-term debt as of Jun 30, 2018 was $6.64 billion compared with $3.69 billion at the end of 2017.<br /><br />Cash from operating activities in the first half of 2018 was $397.2 million, up 9.2% from $363.7 million in first-half 2017.</p>

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Evergy has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, 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.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Evergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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