It has been about a month since the last earnings report for Pinnacle West (PNW Quick QuotePNW - Free Report) . Shares have added about 10.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Pinnacle West 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.

Pinnacle West Q4 Earnings Surpass Estimates, Sales Lag

Pinnacle West Capital Corporation reported fourth-quarter 2023 break-even earnings. The Zacks Consensus Estimate was pegged at a loss of 10 cents per share. In the year-ago quarter, the company reported a loss of 21 cents.

In 2023, earnings were $4.41, up 3.52% from $4.26 reported in 2022.

Total Revenues

Sales for the quarter totaled $0.99 billion, which lagged the Zacks Consensus Estimate of $1.01 billion by 2.2%.

In 2023, total revenues were $4.69 billion, up 8.6% from $4.32 billion reported in 2022.

Operational Highlights

Total operating expenses were $917.2 million, down 5.7% year over year. This was due to a decline in fuel and power purchase costs, offset marginally by higher depreciation and amortization expenses.

Total operational and maintenance expenses were $281.4 million, up 3.6% year over year.

Operating income totaled $74.4 million, up 102.2% from $36.7 million recorded in the year-ago quarter.

Total interest expenses were $96.1 million, up 23.4% from $77.9 million registered in the prior-year period.

Financial Highlights

Cash and cash equivalents totaled $4.95 million as of Dec 31, 2023, compared with $4.8 million as of Dec 31, 2022.

Long-term debt less current maturities amounted to $7.54 billion as of Dec 31, 2023, lower  than $7.74 billion recorded as of Dec 31, 2022.

Net cash flow provided by operating activities in 2023 totaled $1.2 billion compared with $1.24 billion a year ago.

Guidance

PNW expects 2024 consolidated earnings in the range of $4.60-$4.80 per share. The Zacks Consensus Estimate is pegged at $4.75, higher than the mid-point of the company’s guided range.

The company plans to invest $7.8 billion in 2023-2026 period to further strengthen its operations.

Management expects its retail customer will increase in the range of 1.5-2.5% in 2024 from 2023 levels.

 

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted -28.57% due to these changes.

VGM Scores

At this time, Pinnacle West has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. 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

Pinnacle West 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

Pinnacle West is part of the Zacks Utility - Electric Power industry. Over the past month, NiSource (NI Quick QuoteNI - Free Report) , a stock from the same industry, has gained 6.2%. The company reported its results for the quarter ended December 2023 more than a month ago.

NiSource reported revenues of $1.42 billion in the last reported quarter, representing a year-over-year change of -16.6%. EPS of $0.53 for the same period compares with $0.50 a year ago.

For the current quarter, NiSource is expected to post earnings of $0.79 per share, indicating a change of +2.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -1.9% over the last 30 days.

NiSource has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.