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PG&E (PCG) Down 15.2% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for PG&E (PCG - Free Report) . Shares have lost about 15.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is PG&E 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.

PG&E Corporation Q1 Earnings Beat, Revenues Down Y/Y
 
PG&E Corporation reported adjusted operating earnings per share of $1.04 in first-quarter 2019, which surpassed the Zacks Consensus Estimate of 90 cents by 15.6%. The bottom line also increased 14.3% from the year-ago quarter’s figure.
 
The increase in quarter-over-quarter non-GAAP earnings from operations was primarily driven by growth in rate base earnings, timing of insurance premiums and timing of taxes.
 
Including one-time items, the company reported GAAP earnings of 25 cents per share compared to 86 cents in the prior-year quarter.
 
Revenue Update
 
PG&E Corp’s total revenues of $4,011 million missed the Zacks Consensus Estimate of $4,190 million by 4.2%. The top line also declined 1.1% from the year-ago quarter.
 
While electric revenues decreased 5.4% from the prior-year quarter’s figure, natural gas revenues improved 10.3% year over year.
 
Operational Highlights
 
Operating expenses in the reported quarter totaled $3,822 million, up 10.6% from $3,457 million in first-quarter 2018. Costs increased due to higher cost of natural gas, increased operating and maintenance expenses along with escalated depreciation, amortization and decommissioning expenses.
 
The company generated operating income of $189 million compared to operating income of $599 million in the previous year’s first quarter.
 
Interest expenses in first-quarter 2019 summed $103 million compared with $220 million in the year-ago period.
 
Guidance
 
PG&E Corp has not provided guidance for 2019 GAAP earnings and adjusted earnings from operations, due to the continuing uncertainty related to the 2018 Camp Fire and the 2017 Northern California wildfires, and the Chapter 11 proceedings, and legislative and regulatory reforms.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, PG&E has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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


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