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Why Is Public Service Enterprise (PEG) Down 2.6% Since its Last Earnings Report?

A month has gone by since the last earnings report for Public Service Enterprise Group IncorporatedPEG . Shares have lost about 2.6% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is PEG 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 drivers.

Public Service Enterprise Q4 Earnings Top, Issues View

Public Service Enterprise delivered fourth-quarter 2017 adjusted operating earnings of 57 cents per share, which surpassed the Zacks Consensus Estimate by a penny. The bottom line also improved 5.6% on a year-over-year basis.

Excluding one-time adjustments, the company reported quarterly earnings of $1.88 per share against a loss of 19 cents in fourth-quarter 2016.

In 2017, the company reported adjusted operating earnings of $2.93 per share, which surpassed the Zacks Consensus Estimate of $2.91 by 0.7%. The bottom line also rose 1% on a year-over-year basis.

Total Revenues

Revenues of $2,096 million in the quarter missed the Zacks Consensus Estimate of $2,357 million by 11.1%. However, the figure rose 0.3% from the year-ago figure of $2,090 million.

During the reported quarter, electric sales volume improved 1.5% to 9,542 million kilowatt-hours, while gas sales volume decreased 9.2% to 950 million therms.

For electric sales, results reflected a 1.1% rise in the commercial and industrial sector, 2.5% rise in residential sector, 2.7% fall in street lighting and 2% drop in interdepartmental sector.

Total gas sales volume in the reported quarter declined on 40.8% drop in non-firm sales volume of gas, while firm sales volume of gas improved 4.8%.

In 2017, the company reported revenues of $9.08 billion that missed the Zacks Consensus Estimate of $9.33 billion. However, the figure rose 0.3% from the year-ago figure of $9.06 billion.

Highlights of the Release

During the fourth quarter, the company reported operating income of $362 million compared with operating loss of $175 million in the year-ago quarter. Total operating expenses were $1,734 million, down 23.4% from the year-ago quarter figure.

Interest expenses in the reported quarter were $102 million compared with $97 million in the year-ago quarter.

Segment Performance

PSE&G: Segment earnings were $220 million, up from $193 million in the prior-year quarter.

PSEG Power: The segment earnings were $610 million against a loss of $302 million a year ago.

PSEG Enterprise/Other: The segment earnings were $126 million compared with $11 million in the third quarter of 2016.

Financial Update

As of Dec 31, 2017 cash and cash equivalents were $313 million compared with $423 million as of Dec 31, 2016.

Long-term debt as of Dec 31, 2017 was $13,068 million, up from the 2016-end level of $11,395 million.

Public Service Enterprise Group generated $3,261 million in cash from operations in 2017, down from the year-ago figure of $3,311.

2018 Guidance

The company issued 2018 guidance. Adjusted earnings are projected in the range of $3.00-$3.20.

PSE&G's operating earnings are anticipated in the band of $1,000-$1,030 million. The company expects PSEG Power operating earnings guidance in $485-$560 million range.

Additionally, PSEG Enterprise/Other's operating earnings expectations are projected at $35 million.

How Have Estimates Been Moving Since Then?

In the past month , investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

Public Service Enterprise Group Incorporated Price and Consensus

Public Service Enterprise Group Incorporated Price and Consensus | Public Service Enterprise Group Incorporated Quote

VGM Scores

At this time, PEG has a poor Growth Score of F, however its Momentum is doing a lot 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.

Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Notably, PEG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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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.


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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