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WEC Energy (WEC) Up 5.9% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for WEC Energy Group (WEC - Free Report) . Shares have added about 5.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is WEC 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 its most recent earnings report in order to get a better handle on the important catalysts.

WEC Energy Earnings & Revenues Beat Estimates in Q1

WEC Energy delivered first-quarter 2019 adjusted earnings of $1.33 per share, which beat the Zacks Consensus Estimate of $1.25 by 6.4%. The bottom line was up 8.1% from the year-ago quarter’s tally of $1.23. The upside can be attributed to colder than usual weather and focus on operating efficiency across the system.

Revenues

Total revenues amounted to $2,377.4 million, beating the Zacks Consensus Estimate of $2,294 million by 3.63%. The figure was also higher than $2,286.5 million reported in the year-ago quarter.

Highlights of the Release

Residential use of electricity rose 3.4% year over year. Electricity consumption by small commercial and industrial customers declined 0.4%. Electricity utilized by large commercial and industrial customers, excluding iron ore mines, declined 1.1%.

WEC Energy witnessed increase in customer base in the reported quarter. At the end of March 2019, the company had an additional 11,000 electric and 22,000 natural gas customers compared with the year-ago quarter’s level.

Natural gas deliveries in Wisconsin, excluding gas utilized for power generation, were up 7% year over year. On a weather normal basis, natural gas deliveries rose 2.6%.

Retail deliveries of electricity, excluding iron ore mine in Michigan's Upper Peninsula, increased 0.5% in the first quarter compared with the year-ago quarter.

Financial Position

As of Mar 31, 2019, WEC Energy had cash and cash equivalents of $30.6 million compared with $84.5 million as of Dec 31, 2018.
 
As of Mar 31, 2019, the company had long-term debt of $10.3 billion, up from $10 billion at 2018-end.

Net cash generated by the company’s operating activities in the first quarter was $735.7 million compared with $894 million in the year-ago period.

Capital expenditure in the first quarter was $358.8 million, down from $439.6 million in the year-ago period.

Guidance

The company reaffirmed 2019 earnings per share guidance in the range of $3.48-$3.52.
 

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, WEC Energy has an average Growth Score of C, however its Momentum Score is doing a bit 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

WEC 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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