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HEI (HE) Down 3.3% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Hawaiian Electric (HE - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the S&P 500.

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

Hawaiian Electric Q3 Earnings Match Estimates, Fall Y/Y

Hawaiian Electric Industries Inc. (HE - Research Report) reported earnings per share (EPS) of 58 cents in the third quarter of 2019, which came in line with the Zacks Consensus Estimate. The bottom line declined 3.3% from 60 cents in the prior-year quarter.

The year-over-year downside in earnings can be attributed to higher expenses incurred in the reported quarter.

Total Revenues

Hawaiian Electric’s total revenues of $771.5 million in the third quarter surpassed the Zacks Consensus Estimate of $771 million by 0.01%. The top line rose 0.5% year over year. The improvement can be attributed to increased contributions from both the Electric Utility and Bank segments.

Operating Statistics

Total expenses increased 0.6% year over year to $674.2 million during the third quarter.

Total operating income declined 0.8% year over year to $97.3 million due to lower contributions from the Electric Utility segment.

Net interest expenses amounted to $22.4 million, up from $22.5 million in the prior-year quarter.

Segment Details

Electric Utility: Revenues at this segment totaled $688.3 million, up a mere 0.1% year over year. Also, net income decreased 5.9% to $46.8 million from $49.7 million a year ago.

Banking: At this segment, revenues totaled $83.2 million, up 3.4% year over year. Net income came in at $22.8 million, up 7.9%.

Financial Position

Hawaiian Electric had cash and cash equivalents of $177 million as of Sep 30, 2019, compared with $169.2 million as of Dec 30, 2018.

Long-term debt, other than bank, was $1,885.5 million as of Sep 30, 2019, compared with $1,879.6 million as of Dec 31, 2018.

In the first nine months of 2019, net cash inflow from operating activities totaled $341.4 million compared with cash inflow of $257.7 million in the first nine months of 2018.

Guidance

Hawaiian Electric reaffirmed its earnings guidance for 2019. The company continues to expect earnings of $1.85-$2.05 per share. The Zacks Consensus Estimate for 2019 earnings is pegged at $1.88, which lies below the midpoint of the company guided range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

At this time, HEI 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

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, HEI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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