Yahoo Finance Eversource (ES) Down 5.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Eversource Energy (ES). Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Eversource 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.
Eversource Energy Q1 Earnings Beat, Sales Lag Estimates
Eversource Energy reported first-quarter 2024 adjusted earnings of $1.49 per share, which surpassed the Zacks Consensus Estimate of $1.45 by 2.8%. The bottom line increased 5.7% from the year-ago quarter’s figure of $1.41.
The uptick was driven by a higher level of investment in ES’ electric transmission system. This was needed for addressing system capacity growth and delivering clean energy resources for the region. New electric and natural gas distribution rates also contributed toward strong bottom-line performance in the quarter under review.
Total Revenues
ES’ revenues of $3.33 billion missed the Zacks Consensus Estimate of $4.14 billion by 19.5%. Total revenues also declined 12.2% from the year-ago quarter’s figure of $3.79 billion.
Highlights of the Release
Total operating expenses were $2.48 billion, down 18.4% year over year. This was caused by lower purchased power, purchased natural gas and transmission expenses compared with the prior-year quarter.
Interest income was $845.9 million, up 12.9% year over year.
Interest expenses were $250.8 million, 28.9% higher year over year.
Segmental Performance
Electric Transmission: Earnings totaled $176.7 million, up 13.9% year over year.
Electric Distribution: Earnings amounted to $168.1 million, up 1.6% year over year. This was due to higher revenues from investments in the distribution system and a base distribution rate increase for the company’s Massachusetts electric business.
Natural Gas Distribution: Earnings totaled $190.6 million, up 11.9% year over year. Higher revenues associated with investments in its natural gas infrastructure and a base distribution rate increase at NSTAR Gas resulted in this upside.
Water Distribution: Earnings amounted to $5.4 million, increasing 260% year over year. The improvement was on the back of contribution from acquired assets and lower depreciation expenses.
Eversource Parent & Other Companies: The segment reported quarterly loss of $19 million, wider than the year-ago quarter's loss of $1.2 million. This decline was caused by higher interest expenses marginally offset by a lower effective tax rate.
Guidance
Eversource Energy reaffirmed its 2024 earnings in the band of $4.50-$4.67 per share. The Zacks Consensus Estimate is pegged at $4.51, lower than $4.58, the midpoint of the company’s guided range.
The company’s expects long-term EPS growth rate from existing core regulated businesses to be between 5% and 7% through 2028, using $4.34 per share earned in 2023 as a base.
It plans to invest $23.1 billion during 2024-2028, out of which nearly $16.1 billion will be invested in electric and natural gas distribution networks, and $7.2 billion in the electric transmission segment.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Eversource has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 D. 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 has been net zero. Notably, Eversource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Eversource belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, NextEra Energy (NEE), has gained 13.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
NextEra reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of -14.7%. EPS of $0.91 for the same period compares with $0.84 a year ago.
NextEra is expected to post earnings of $0.90 per share for the current quarter, representing a year-over-year change of +2.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
NextEra has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Eversource Energy (ES) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
