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Pattern Energy (PEGI) Up 1% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Pattern Energy (PEGI - Free Report) . Shares have added about 1% in that time frame, outperforming the S&P 500.

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

Pattern Energy Incurs Loss in Q1, Misses on Revenues

Pattern Energy Group reported a loss of 31 cents in the first quarter 2019, versus earnings of $1.32 per share in the year-ago quarter. The Zacks Consensus Estimate for earnings was pegged at 12 cents.

The downside was caused by losses at existing projects, divestitures in 2018, derivative losses and net loss in the development investment segment.
 
Total Revenues

First-quarter revenues amounted to $135 million, which lagged the Zacks Consensus Estimate of $150 million by 10%. However, the figure improved 20.5% from $112 million reported in the prior-year quarter.

Quarterly Highlights

Pattern Energy sold 2,115,855 megawatt hours (MWh) of electricity on a proportional basis compared with 2,135,715MWh in the year-ago quarter. The 1% decline was primarily caused by volume decreases stemming from divestitures in 2018 and unfavorable wind conditions.

Total operating expenses amounted to $15 million in line with the year-ago quarters level.

The company incurred interest expenses of $26 million compared with $25 million in the year-ago quarter.

Financial Highlights

As of Mar 31, 2019, the company had cash and cash equivalents of $93 million compared with $101 million Dec 31, 2018.

Its long-term debt was $2,045 million as of Mar 31, 2019, up from the Dec 31, 2018 level of $2,004 million.

The company’s cash flow from operating activities in the first quarter was $8 million, down from $28 million recorded in the year-ago quarter.

Guidance

Pattern Energy reaffirmed 2019 annual cash available for distribution in the range of $160-$190 million. The company also reaffirmed 2020 cash available for distribution in the band of $185-$225 million.
 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted 29.63% due to these changes.

VGM Scores

At this time, Pattern Energy has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

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

Outlook

Pattern 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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