Why Is CMS Energy (CMS) Up 3.8% Since the Last Earnings Report?

About a month has gone by since the last earnings report for CMS Energy Corporation CMS. Shares have added about 3.8% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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.

CMS Energy Beats on Q3 Earnings, Issues ’18 Outlook

CMS Energy reported third-quarter 2017 adjusted earnings per share of 62 cents, considering restructuring cost as one-time item. The figure surpassed the Zacks Consensus Estimate of 55 cents by 12.7%. Quarterly earnings however dropped 11.4% from the year-ago figure of 70 cents.

Excluding the one-time item, CMS Energy reported earnings of 61 cents per share, which dropped 9% year over year.

Operational Performance

In the quarter under review, CMS Energy’s operating revenues came in at $1,527 million, which missed the Zacks Consensus Estimate of $1,530 million by a mere 0.2%. Moreover, on a year-over-year basis, revenues dropped 3.8% from $1,587 million.

The company’s operating expenses dropped 1.3% to $1,197 million during the quarter.

Operating income during the third quarter was $330 million, down 1.2% from $375 million a year ago.

CMS Energy’s interest charges were $111 million, compared with $110 million in the year-ago period.

Financial Condition

CMS Energy had cash and cash equivalents of $142 million as of Sep 30, 2017, down from $235 million as of Dec 31, 2016.

As of Sep 30, 2017, total debt, capital leases and financing obligations was $10,016 million, up from $9,706 million as of Dec 31, 2016.

At the end of the third quarter, cash from operating activities was $1,119 million compared with $1,241 million in the year-ago period.

Guidance

CMS Energy raise the lower end of its 2017 adjusted earnings per share guidance in to the range of $2.15-$2.18, from the earlier guidance band of $2.14-$2.18. However, adjusted earnings are still expected to grow year over year in the range of 6-8% in 2017.

CMS Energy in 2018 adjusted expects earnings per share to be around $2.29-$2.33, reflecting annual growth of 6-8%.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, the stock has a poor Growth Score of F, however its Momentum is doing a bit better with a C. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is equally suitable for momentum investors than value investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.

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