Avangrid (AGR) Up 12.8% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Avangrid (AGR). Shares have added about 12.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Avangrid due for a pullback? 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.

AVANGRID Q4 Earnings Surpass Estimates, Sales Rise Y/Y

AVANGRID, Inc. reported fourth-quarter 2023 earnings of 97 cents per share, which surpassed the Zacks Consensus Estimate of 94 cents by 3.2%. The bottom line also increased 149% from the year-ago quarter’s 39 cents.

Full-year 2023 earnings were $2.09 per share, down 10.3% from the previous year’s level of $2.33.

Total Revenues

Operating revenues amounted to $2.28 billion, which missed the Zacks Consensus Estimate of $2.42 billion by 5.7%. The top line increased 5.6% from $2.16 billion reported in the comparable period of 2022.

Full-year 2023 revenues totaled $8.31 billion, up 4.9% from the previous year’s $7.92 billion.

Highlights of the Release

Operating expenses totaled $1.83 billion, down 5.7% from the year-ago quarter’s recorded number of $1.94 billion. This was due to a 20.9% decrease in purchased power, natural gas and fuel used.

Operating income amounted to $450 million, up 107% from $217 million reported in the prior-year period.

Adjusted Net income was $374 million, up 146% from $152 million recorded in the comparable period of 2022.

The company successfully started the first turbine from nation-leading Vineyard Wind 1 offshore wind project as of 2023-end, recurrent power as of Jan 2, 2024, and closed on $1.2 billion tax equity.

Segmental Details

Networks’ adjusted net income was $363 million, up 131% from $157 million reported in the year-ago quarter.

Renewables’ net loss totaled $7 million against net income of $81 million in the prior-year quarter.

Corporate and Others’ net income was $18 million against a reported loss of $86 million in the year-ago period.

Guidance

AVANGRID announced its projection for 2024 adjusted net income and earnings per share in the range of $839-$897 million and $2.17-$2.32, respectively, including 386.7 million average shares outstanding. The Zacks Consensus Estimate for earnings is pegged at $2.25 per share, on par with the midpoint of the company’s guided range.

 

How Have Estimates Been Moving Since Then?

Estimates review followed a downward path over the past two months.

The consensus estimate has shifted -7.58% due to these changes.

VGM Scores

At this time, Avangrid has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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

Avangrid 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

Avangrid belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, PPL (PPL), has gained 0.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.

PPL reported revenues of $2.03 billion in the last reported quarter, representing a year-over-year change of -11.3%. EPS of $0.40 for the same period compares with $0.28 a year ago.

For the current quarter, PPL is expected to post earnings of $0.52 per share, indicating a change of +8.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PPL. Also, the stock has a VGM Score of F.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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