Back to top

Image: Bigstock

Why Is CMS Energy (CMS) Down 11.2% Since Last Earnings Report?

Read MoreHide Full Article

It has been about a month since the last earnings report for CMS Energy (CMS - Free Report) . Shares have lost about 11.2% in that time frame, underperforming the S&P 500.

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

CMS Energy Misses on Q4 Earnings, Tweaks EPS View

CMS Energy Corporation reported fourth-quarter 2019 adjusted earnings per share (EPS) of 68 cents, up 70% from the year-ago quarter reported figure of 40 cents. The bottom line however missed the Zacks Consensus Estimate of 69 cents.

Including one-time items, the company posted GAAP earnings of 58 cents per share in the reported quarter, up from 38 cents generated in the year ago quarter.

The year-over-year uptick in the bottom line can be attributed to higher operating income.

For 2019, the company posted adjusted earnings of $2.49 per share, up from $2.33 per share in 2018. The full-year bottom line came in line with the Zacks Consensus Estimate.

Operational Performance

In the quarter under review, CMS Energy’s operating revenues totaled $1,795 million, which missed the Zacks Consensus Estimate of $1,877 million by 4.4%. The top line also fell 1.9% on a year-over-year basis.

For 2019, the company recorded operating revenues of $6.85 billion, which missed the Zacks Consensus Estimate of $6.94 billion by 1.3%. The full-year top line slipped 0.4% from the year ago count.

The company’s operating expenses declined 6% to $1,484 million in the quarter under review.

Operating income in the fourth quarter was $311 million, up 24.4% from $250 million in the year-ago quarter.

CMS Energy’s interest charges were $134 million, up 10.7% from $121 million in the year-ago period.

Financial Condition

CMS Energy had cash and cash equivalents of $140 million as of Dec 31, 2019, down from $153 million as of Dec 31, 2018.

As of Dec 31, 2019, total debt, capital leases and financing obligations (excluding securitization debt) were $12,996 million, up from $11,500 million as of Dec 31, 2018.

At the end of 2019, cash from operating activities amounted to $1,790 million compared with $1,703 million in 2018.

2020 Guidance

CMS Energy raised the lower end its 2020 adjusted earnings per share guidance to the range of $2.64-$2.68 from the prior band of $2.63-$2.68. Currently, the Zacks Consensus Estimate for the company’s current-year earnings is pegged at $2.67, slightly higher than the midpoint of the company’s new guided range.

However, the updated guidance range continues to reflect 6-8% growth from the year-ago quarter’s reported figure.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, CMS Energy has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

CMS Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


CMS Energy Corporation (CMS) - free report >>

Published in