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Why Is OGE Energy (OGE) Up 1.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for OGE Energy (OGE - Free Report) . Shares have added about 1.2% in that time frame, outperforming the S&P 500.

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

OGE Energy Q4 Earnings Beat Estimates, Revenues Up Y/Y

OGE Energy’s fourth-quarter 2018 earnings of 27 cents per share surpassed the Zacks Consensus Estimate of 24 cents by 12.5%. However, the reported figure plunged 81.8% from $1.48 registered in the year-ago quarter. The downturn can be attributed to lower earnings from the utility business.

For 2018, the company reported earnings of $2.12 per share, which outpaced the Zacks Consensus Estimate of $2.08 by 1.9%. However, the bottom line declined 31.6% from $3.10 registered in the prior year.

Revenues

OGE Energy’s operating revenues of $511.8 million rose 2% from the prior-year quarter’s $501.9 million. The upside was primarily driven by year-over-year higher residential, industrial, oilfield and integrated market revenues.

For 2018, the company generated operating revenues of $2.27 billion, which inched up 0.4% from the prior-year figure of $2.26 billion.

Operational Highlights

Total sales in the reported quarter amounted to 6.8 million megawatt-hours (MWh), almost in line with 6.7 million MWh in the prior-year quarter. Higher system sales were offset by lower integrated market sales. Meanwhile, the company’s customer count inched up 0.9% to 849,372.

Cost of sales summed $228.9 million compared with $201.1 million in the prior-year quarter.

Total operating expenses rose 4.6% year over year to $224.9 million on account of higher operation and maintenance expenses, depreciation and amortization expenses as well as higher taxes (other than income). Consequently, operating income decreased 32.3% to $58 million from the year-ago quarter’s $85.7 million.

Interest expenses totaled $37.8 million in the fourth quarter, up from $35.8 million a year ago.

Other Highlights of the Release

OGE Energy reported net income of $425.5 million in 2018, down from the prior-year figure of $619 million.

OG&E: The segment’s net income rose 7.2% to $328 million in 2018, from $306 million in 2017.

Natural Gas Midstream Operations: The segment posted net income of $109 million compared with $324 million in the prior year.

2018 Guidance

OGE Energy expects its earnings for 2019 to lie in the range of $2.05-$2.20 per share. The Zacks Consensus Estimate for 2019 earnings is pegged at $2.19, near the high end of the company’s guided range.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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