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Why Is Alliant Energy (LNT) Up 5.3% Since Last Earnings Report?

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It has been about a month since the last earnings report for Alliant Energy (LNT - Free Report) . Shares have added about 5.3% in that time frame, outperforming the S&P 500.

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

Alliant Energy Q3 Earnings Beat Estimates, '18 View Up

Alliant Energy Corporation reported third-quarter 2018 operating earnings of 85 cents per share, beating the Zacks Consensus Estimate by a penny. The reported earnings also increased 13.3% from 75 cents recorded in the year-ago quarter.

The year-over-year increase in earnings was due to warmer-than-normal temperatures in the third quarter compared with the prior-year period, in turn adding 2 cents to margins as well. In addition, new electric rates boosted earnings in the reported quarter.    

GAAP earnings in the third quarter were 87 cents compared with 73 cents in the year-ago quarter. The difference between GAAP and operating earnings was due to a one-time gain of 2 cents in the Utilities and Corporate Services segment.

Total Revenues

Total revenues in the third quarter came in at $928.6 million, increasing 2.4% year over year. The revenue growth was due to higher year-over-year contribution from its Electric utility segment.

Operational Highlights

Total operating expenses were $672.5 million in the reported quarter, reflecting a marginal increase of 0.3% from $670.6 million in the year-ago period. This increase in expenses can be attributed to a rise in electric production fuel and purchased power, as well as an increase in electric transmission service cost.

Operating income was $256.1 million, up 8.4% from $236.3 million in the year-ago quarter.

Interest expenses were $63.3 million, reflecting an increase of 17.4% from $53.9 million in the prior-year quarter.

Financial Update

Cash and cash equivalents were $239.7 million as of Sep 30, 2018, up from $27.9 million on Dec 31, 2017.

Long-term debt (excluding current portion) was $5,248.2 million as of Sep 30, 2018, higher than $4,010.6 million on Dec 31, 2017.

In the first nine months of 2018, cash flow from operating activities was $442.2 million compared with $1451.3 million in the corresponding period of 2017.

Guidance

Alliant Energy upwardly revised its 2018 consolidated earnings per share guidance to the range to $2.13-$2.19 from $2.04-$2.18 per share projected earlier.

For Utilities (American Transmission Company LLC and Corporate Services), earnings per share are now expected within $2.04-$2.07. For Non-regulated and Parent & ATC, the company expects earnings per share in the range of 9-12 cents.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -5.41% due to these changes.

VGM Scores

At this time, Alliant Energy has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 C. 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 this revision indicates a downward shift. Notably, Alliant Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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