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Pinnacle West (PNW) Down 0.1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Pinnacle West (PNW - 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 Pinnacle West 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 catalysts.

Pinnacle West's Q1 Earnings Miss Estimates, Improve Y/Y

Pinnacle West Capital adjusted earnings of 16 cents per share in the first quarter of 2019 missed the Zacks Consensus Estimate of 18 cents by 11.1%. In the year-ago quarter, the company had reported adjusted earnings of 3 cents. The year-over-year improvement can be attributed to colder-than-normal weather that led to increase in retail sales.

Total Revenues

Total revenues came in at $740.5 million, which improved 7% on a year-over-year basis.

Operational Highlights

In first-quarter 2019, total operating expenses of $680.4 million increased 2.8% from the year-ago quarter’s tally.

Operating income increased 91.7% year over year to $60 million.

Interest expenses rose 3.4% to $53.9 million from $52.2 million in the year-ago quarter.

Courtesy of the improving Arizona economy, customer volumes improved 1.9% year over year in the quarter under review.

Weather-normalized electricity sales increased 1% in the first quarter compared with 2018’s first quarter.

Guidance

Management reaffirmed its 2019 EPS view in the range of $4.75-$4.95. The mid-point of $4.85 is in line with the current Zacks Consensus Estimate.


 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

At this time, Pinnacle West 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, 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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