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Why Is Pinnacle West (PNW) Up 3.7% Since Last Earnings Report?

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A month has gone by since the last earnings report for Pinnacle West (PNW - Free Report) . Shares have added about 3.7% in that time frame, outperforming the S&P 500.

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

Pinnacle West Q3 Earnings Beat Estimates, Revenues Up

Pinnacle West Capital Corporation reported adjusted earnings per share of $2.80 in the third quarter of 2018, beating the Zacks Consensus Estimate of $2.75 by 1.8%. In the year-ago quarter, the company had posted adjusted earnings of $2.46. The quarterly earnings were driven by the second hottest September on record in Arizona lead to increase in retail sales.

Total Revenues

In the quarter under review, total revenues of $1,268 million improved 7.2% on a year-over-year basis.

Operational Highlights

In third-quarter 2018, total Operating Expenses were $834.7 million, up 15.3% than the year-ago quarter.

Operating income declined 5.7% year over year to $433.3 million.

Interest expenses rose to $61.6 million from $55.6 million in the year-ago quarter.

Financial Condition

Pinnacle West Capital had cash and cash equivalents of $65 million as of Sep 30, 2018, up from $13.9 million as of Dec 31, 2017.

Long-term debt as of Sep 30, 2018 was $4,487.4 million, down from $4,789.7 million as of Dec 31, 2017.

Net cash flow from operating activities was $959.7 million in the first nine months of 2018 higher than $771.9 million in the prior year comparable period.

Guidance

Pinnacle West reaffirmed 2018 earnings guidance in the range of $4.35-$4.55 per share. The company expects 2019 earnings guidance in the range of $4.75-$4.95 per share.
 

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -11.11% due to these changes.

VGM Scores

At this time, Pinnacle West has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Pinnacle West has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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