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PSEG (PEG) Up 4.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for PSEG (PEG - Free Report) . Shares have added about 4.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PSEG 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.
PSEG Q1 Earnings Miss Estimates, Revenues Down Y/Y
Public Service Enterprise Group or PSEG reported first-quarter 2024 adjusted earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.32 by 0.8%. Earnings also declined 5.8% from the prior-year reported figure.
The company reported quarterly GAAP earnings per share (EPS) of $1.06 compared with $2.58 in the corresponding period of 2023.
The year-over-year deterioration can be attributed to higher investment-related expenses.
Total Revenues
Operating revenues in the first quarter totaled $2.76 billion, which beat the Zacks Consensus Estimate of $2.65 billion by 4.1%. The top line, however, declined 26.5% from the year-ago quarter’s figure of $3.76 billion.
Sales Volume
Electric sales volumes totaled 9,731 million kilowatt-hours, which improved 3% year over year. On the other hand, gas sales volumes improved 8% to 1,277 million therms.
Under electric sales, residential sales volumes totaled 3,089 million kilowatt-hours, up 5% from the prior-year quarter’s figure. Its commercial and industrial sales volumes accounted for 6,542 million kilowatt-hours, registering a year-over-year improvement of 1%.
Other sales amounted to 100 million kilowatt-hours, up 2% from the year-ago quarter’s level.
Total gas sales volumes witnessed a year-over-year increase of 6% and 23% in firm sales volumes and non-firm sales volumes of gas, respectively.
Highlights of the Release
The operating income totaled $685 million in the first quarter compared with $1,648 million in the year-ago period. This indicated a year-over-year decline of 58.4%. Total operating expenses were $2.08 billion, down 1.5% from the year-ago quarter’s reported actuals.
Segmental Performance
PSE&G: This segment’s net income totaled $488 million, up from $487 million recorded in the first quarter of 2023.
PSEG Power & Other: Adjusted operating income for this unit amounted to $169 million compared with $203 million in the prior-year quarter.
Financial Update
The long-term debt (including the current portion of the long-term debt) as of Mar 31, 2024, was $21.26 billion compared with $19.28 billion as of Dec 31, 2023.
PSEG generated $0.66 billion worth of cash from operations during the first quarter compared with $1.86 billion in the prior-year period.
2024 Guidance
The company reaffirmed its full-year guidance. PEG continues to expect adjusted earnings in the range of $3.60-$3.70 per share. The Zacks Consensus Estimate for earnings is currently pegged at $3.66 per share, just above the midpoint of the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, PSEG has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, PSEG 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
PSEG is part of the Zacks Utility - Electric Power industry. Over the past month, NextEra Energy (NEE - Free Report) , a stock from the same industry, has gained 11.8%. The company reported its results for the quarter ended March 2024 more than a month ago.
NextEra reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of -14.7%. EPS of $0.91 for the same period compares with $0.84 a year ago.
NextEra is expected to post earnings of $0.90 per share for the current quarter, representing a year-over-year change of +2.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for NextEra. Also, the stock has a VGM Score of D.
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PSEG (PEG) Up 4.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for PSEG (PEG - Free Report) . Shares have added about 4.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PSEG 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.
PSEG Q1 Earnings Miss Estimates, Revenues Down Y/Y
Public Service Enterprise Group or PSEG reported first-quarter 2024 adjusted earnings of $1.31 per share, which missed the Zacks Consensus Estimate of $1.32 by 0.8%. Earnings also declined 5.8% from the prior-year reported figure.
The company reported quarterly GAAP earnings per share (EPS) of $1.06 compared with $2.58 in the corresponding period of 2023.
The year-over-year deterioration can be attributed to higher investment-related expenses.
Total Revenues
Operating revenues in the first quarter totaled $2.76 billion, which beat the Zacks Consensus Estimate of $2.65 billion by 4.1%. The top line, however, declined 26.5% from the year-ago quarter’s figure of $3.76 billion.
Sales Volume
Electric sales volumes totaled 9,731 million kilowatt-hours, which improved 3% year over year. On the other hand, gas sales volumes improved 8% to 1,277 million therms.
Under electric sales, residential sales volumes totaled 3,089 million kilowatt-hours, up 5% from the prior-year quarter’s figure. Its commercial and industrial sales volumes accounted for 6,542 million kilowatt-hours, registering a year-over-year improvement of 1%.
Other sales amounted to 100 million kilowatt-hours, up 2% from the year-ago quarter’s level.
Total gas sales volumes witnessed a year-over-year increase of 6% and 23% in firm sales volumes and non-firm sales volumes of gas, respectively.
Highlights of the Release
The operating income totaled $685 million in the first quarter compared with $1,648 million in the year-ago period. This indicated a year-over-year decline of 58.4%. Total operating expenses were $2.08 billion, down 1.5% from the year-ago quarter’s reported actuals.
Segmental Performance
PSE&G: This segment’s net income totaled $488 million, up from $487 million recorded in the first quarter of 2023.
PSEG Power & Other: Adjusted operating income for this unit amounted to $169 million compared with $203 million in the prior-year quarter.
Financial Update
The long-term debt (including the current portion of the long-term debt) as of Mar 31, 2024, was $21.26 billion compared with $19.28 billion as of Dec 31, 2023.
PSEG generated $0.66 billion worth of cash from operations during the first quarter compared with $1.86 billion in the prior-year period.
2024 Guidance
The company reaffirmed its full-year guidance. PEG continues to expect adjusted earnings in the range of $3.60-$3.70 per share. The Zacks Consensus Estimate for earnings is currently pegged at $3.66 per share, just above the midpoint of the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, PSEG has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision has been net zero. Notably, PSEG 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
PSEG is part of the Zacks Utility - Electric Power industry. Over the past month, NextEra Energy (NEE - Free Report) , a stock from the same industry, has gained 11.8%. The company reported its results for the quarter ended March 2024 more than a month ago.
NextEra reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of -14.7%. EPS of $0.91 for the same period compares with $0.84 a year ago.
NextEra is expected to post earnings of $0.90 per share for the current quarter, representing a year-over-year change of +2.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for NextEra. Also, the stock has a VGM Score of D.