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Why Is NiSource (NI) Down 0.1% Since Last Earnings Report?

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It has been about a month since the last earnings report for NiSource (NI - Free Report) . Shares have lost about 0.1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is NiSource due for a breakout? 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 drivers.

NiSource Q1 Earnings and Revenues Surpass Estimates

NiSource delivered operating earnings of 82 cents per share in first-quarter 2019, beating the Zacks Consensus Estimate of 77 cents by 6.5%. The bottom line also increased 6.5% from the year-ago quarter’s tally. The upside was primarily driven by the company’s continued execution of long-term utility infrastructure modernization programs.

On a GAAP basis, the company reported earnings of 55 cents compared with 82 cents in the prior-year quarter.

Total Revenues

NiSource generated operating revenues of $1,858.1 million in first-quarter 2019, which outpaced the Zacks Consensus Estimate of $1,841 million by 1%. The top line also increased 6% from $1,752.2 million recorded in the year-ago quarter.

Highlights of the Release

Total operating expenses in the quarter under review increased 8.8% year over year to $681.5 million.

Total interest expenses in the reported quarter increased 2.7% from the prior-year quarter’s figure to $95.6 million.

Financial Update

NiSource's cash and cash equivalents as of Mar 31, 2019, were $151 million, up from $112.8 million as of Dec 31, 2018.

Long-term debts (excluding amounts due within a year) as of Mar 31, 2019, were $7,110.1 million compared with $7,105.4 million as of Dec 31, 2018.

Net cash provided from operating activities in the first quarter was $399.1 million, up from $388.2 million in the prior-year quarter.

Guidance

For 2019, NiSource reaffirmed investment guidance in the range of $1.6-$1.7 billion. Management projects 2019 EPS in the range of $1.27-$1.33. The mid-point of $1.30 is in line with the current Zacks Consensus Estimate.

NiSource expects its earnings and dividend to increase by 5% to 7% annually from 2019 through 2022. The company expects to make capital investments of $1.6-$2.0 billion annually from 2020 to 2022 time period.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -23.81% due to these changes.

VGM Scores

Currently, NiSource has a nice Growth Score of B, a grade with the same score on the momentum front. 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

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, NiSource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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