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Pinnacle West (PNW) Down 35.2% 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 35.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is 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 the most recent earnings report in order to get a better handle on the important drivers.

Pinnacle West Earnings Beat Estimates in Q4, Sales Down

Pinnacle West Capital delivered adjusted earnings per share (EPS) of 57 cents in the fourth quarter of 2019, which beat the Zacks Consensus Estimate of 47 cents by 21.3%. In the year-ago quarter, the company had reported adjusted earnings of 23 cents. The bottom-line reflects improved customer growth, infrastructure investments and cost management.

In 2019, Pinnacle West Capital generated earnings of $4.77 per share, up from $4.54 in 2018.

Total Revenues

In the quarter under review, total revenues of $670.4 million fell 11.4% on a year-over-year basis.

In 2019, the company delivered revenues of $3.47 billion, down 6% from $3.69 billion in 2018.

Operational Highlights

In fourth-quarter 2019, total operating expenses were $658.4 million, down 4.5% from the year-ago quarter’s tally.

Operating income plunged 82.1% year over year to $11.9 million.

Interest expenses declined to $59.6 million from $62.2 million in the year-ago quarter.

The company set a new goal to serve APS customers with 100% clean energy by 2050.

Guidance

Management reaffirmed 2020 EPS in the range of $4.75-$4.95, whose mid-point of $4.85 is in line with the current Zacks Consensus Estimate.


 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Pinnacle West has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. 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

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


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