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NiSource (NI) Down 0.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for NiSource (NI - Free Report) . Shares have lost about 0.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NiSource 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.
NiSource Q3 Earnings Beat Estimates, Revenues Fall Y/Y
NiSource Inc. reported third-quarter 2023 operating earnings per share (EPS) of 19 cents, which surpassed the Zacks Consensus Estimate of 14 cents by 35.7%. The bottom line increased 90% from the year-ago quarter’s recorded figure of 12 cents.
On a GAAP basis, the company reported EPS of 17 cents compared with 12 cents in the prior-year quarter.
Total Revenues
Operating revenues of $1,027.4 million missed the Zacks Consensus Estimate of $1,057 million by 2.8%. The top line also decreased 5.7% from the prior-year quarter’s figure of $1,089.5 million.
Highlights of the Release
Total operating expenses amounted to $794.4 million, down 14.8% from the year-ago quarter’s level of $932.8 million due to lower energy and operation and maintenance (O&M) costs. Our model predicted total operating expenses of $841.8 million for the quarter.
Operating income totaled $233 million, up 48.7% from the year-ago figure of $156.7 million.
Net interest expenses amounted to $129.2 million, up 41% from the prior-year quarter’s $91.6 million.
Total gas distribution in Sales and Transportation was recorded at 163.5 Million British Thermal Units per day (MMDth) while our model predicted 168 MMDth.
Total electric sales were recorded at 4,087.1 gigawatt-hour (GWh) while our model projected 4,222 GWh.
Financial Update
NiSource's cash and cash equivalents as of Sep 30, 2023, were $56 million compared with $40.8 million as of Dec 31, 2022. The company had $1 billion in net available liquidity as of Sep 30, 2023.
Long-term debts (excluding those due within a year) as of Sep 30, 2023, were $11,011.3 million compared with $9,523.6 million as of Dec 31, 2022.
Net cash flows from operating activities in the first nine months of 2023 were $1,535.9 million compared with $1,036.2 million in the year-ago period.
Guidance
NiSource reaffirmed its 2023 non-GAAP net operating earnings (NOE) guidance in the range of $1.54-$1.60 per share. It now expects earnings to be toward the upper half of the range. The Zacks Consensus Estimate for the same is pegged at $1.58 per share, which is higher than the midpoint of the company’s projection.
The company expects 2024 non-GAPP NOE in the band of $1.68-1.72. The Zacks Consensus Estimate is pegged at $1.69 per share, which is a tad lower than the midpoint of the company’s guided range. NI expects to witness an earnings CAGR of 6-8% through 2028.
It also projects an investment in the range of $15.2-$16.6 billion during 2024-2028.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, NiSource 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, NiSource has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
NiSource belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, CMS Energy (CMS - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
CMS Energy reported revenues of $1.67 billion in the last reported quarter, representing a year-over-year change of -17.3%. EPS of $0.61 for the same period compares with $0.56 a year ago.
For the current quarter, CMS Energy is expected to post earnings of $1.05 per share, indicating a change of +75% from the year-ago quarter. The Zacks Consensus Estimate has changed -35.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CMS Energy. Also, the stock has a VGM Score of F.
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NiSource (NI) Down 0.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for NiSource (NI - Free Report) . Shares have lost about 0.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NiSource 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.
NiSource Q3 Earnings Beat Estimates, Revenues Fall Y/Y
NiSource Inc. reported third-quarter 2023 operating earnings per share (EPS) of 19 cents, which surpassed the Zacks Consensus Estimate of 14 cents by 35.7%. The bottom line increased 90% from the year-ago quarter’s recorded figure of 12 cents.
On a GAAP basis, the company reported EPS of 17 cents compared with 12 cents in the prior-year quarter.
Total Revenues
Operating revenues of $1,027.4 million missed the Zacks Consensus Estimate of $1,057 million by 2.8%. The top line also decreased 5.7% from the prior-year quarter’s figure of $1,089.5 million.
Highlights of the Release
Total operating expenses amounted to $794.4 million, down 14.8% from the year-ago quarter’s level of $932.8 million due to lower energy and operation and maintenance (O&M) costs. Our model predicted total operating expenses of $841.8 million for the quarter.
Operating income totaled $233 million, up 48.7% from the year-ago figure of $156.7 million.
Net interest expenses amounted to $129.2 million, up 41% from the prior-year quarter’s $91.6 million.
Total gas distribution in Sales and Transportation was recorded at 163.5 Million British Thermal Units per day (MMDth) while our model predicted 168 MMDth.
Total electric sales were recorded at 4,087.1 gigawatt-hour (GWh) while our model projected 4,222 GWh.
Financial Update
NiSource's cash and cash equivalents as of Sep 30, 2023, were $56 million compared with $40.8 million as of Dec 31, 2022. The company had $1 billion in net available liquidity as of Sep 30, 2023.
Long-term debts (excluding those due within a year) as of Sep 30, 2023, were $11,011.3 million compared with $9,523.6 million as of Dec 31, 2022.
Net cash flows from operating activities in the first nine months of 2023 were $1,535.9 million compared with $1,036.2 million in the year-ago period.
Guidance
NiSource reaffirmed its 2023 non-GAAP net operating earnings (NOE) guidance in the range of $1.54-$1.60 per share. It now expects earnings to be toward the upper half of the range. The Zacks Consensus Estimate for the same is pegged at $1.58 per share, which is higher than the midpoint of the company’s projection.
The company expects 2024 non-GAPP NOE in the band of $1.68-1.72. The Zacks Consensus Estimate is pegged at $1.69 per share, which is a tad lower than the midpoint of the company’s guided range. NI expects to witness an earnings CAGR of 6-8% through 2028.
It also projects an investment in the range of $15.2-$16.6 billion during 2024-2028.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, NiSource 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, NiSource has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
NiSource belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, CMS Energy (CMS - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
CMS Energy reported revenues of $1.67 billion in the last reported quarter, representing a year-over-year change of -17.3%. EPS of $0.61 for the same period compares with $0.56 a year ago.
For the current quarter, CMS Energy is expected to post earnings of $1.05 per share, indicating a change of +75% from the year-ago quarter. The Zacks Consensus Estimate has changed -35.9% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CMS Energy. Also, the stock has a VGM Score of F.