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Why Is HEI (HE) Up 2.8% Since Last Earnings Report?

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It has been about a month since the last earnings report for Hawaiian Electric (HE - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.

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

Hawaiian Electric Q3 Earnings Miss, Revenues Up Y/Y

Hawaiian Electric reported earnings per share (EPS) of 60 cents in the third quarter of 2018, which missed the Zacks Consensus Estimate of 62 cents by 3.2%. However, on a year-over-year basis, the bottom line improved 9.1% from the prior-year quarter’s level of 55 cents.

Total Revenues

Hawaiian Electric’s total revenues of $768.1 million in the reported quarter surpassed the Zacks Consensus Estimate of $672 million by 14.2%. The top line was also up 14.1% year over year. The metric improved on higher contributions from Electric Utility and Bank segments.

Operating Statistics

Total expenses were up 19.3% year over year to $670 million during the third quarter.

Total operating income was $98.1 million, down 12% due to lower contributions from Electric Utility segment.

Interest expenses amounted to $22.5 million, up from $19.2 million in the prior-year quarter.

Segment Details

Electric Utility: Segment revenues in the reported quarter were $687.4 million, up 14.8% year over year. Net income increased to $49.7 million from $47.5 million a year ago.

Banking: Segment revenues were $80.5 million, up 8.4%. Net income came in at $21.2 million, up 20.6%.

Other: Segment revenues were $0.14 million, up 12.6% year over year. Moreover, this unit incurred a quarterly net loss of approximately $5 million, in line with the year-ago loss.

Financial Update

Cash and cash equivalents as of Sep 30, 2018 were $172.1 million, down from $261.9 million as of Dec 31, 2017.

Net long-term debt at the end of the third quarter was $1.78 billion, up from $1.68 billion at 2017-end.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

Currently, HEI has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, 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

HEI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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