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Why Is Southwest Gas (SWX) Up 0.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Southwest Gas (SWX - Free Report) . Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Southwest Gas 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 drivers.
Southwest Gas Q2 Earnings Lag Estimates, Revenues Down Y/Y
Southwest Gas Holdings Inc. recorded second-quarter 2024 operating earnings of 31 cents per share, which missed the Zacks Consensus Estimate of 43 cents by 27.9%. The bottom line also decreased 34% from the year-ago quarter’s figure of 47 cents.
Total Revenues
Operating revenues totaled $1.18 billion, which missed the Zacks Consensus Estimate of $1.23 billion by 3.9%. The top line also decreased 8.7% from $1.29 billion in the prior-year quarter.
Highlights of the Release
Utility infrastructure service expenses totaled $604.5 million, down 15.5% from the year-ago quarter’s level of $715.7 million.
The total operating income amounted to $33.1 million compared with $53.2 million in the year-ago quarter.
Total system throughput in the first six months of 2024 was 123.53 million dekatherms, down 8.3% from 134.77 million dekatherms in the first six months of 2023.
In April 2024, the company completed the initial public offering (IPO) of Centuri Holdings, Inc. common stock at $21 per share, along with a concurrent private placement of Centuri's common stock at a price per share equal to the IPO price. The final net proceeds of nearly $328 million were primarily utilized to repay amounts under Centuri's term loan and revolving credit facility, with the remainder for general corporate purposes.
Financial Highlights
Cash and cash equivalents, as of Jun 30, 2024, were $599.6 million compared with $106.5 million as of Dec 31, 2023.
The long-term debt, less current maturities, amounted to $5.06 billion as of Jun 30, compared with $4.61 billion as of Dec 31, 2023.
Southwest Gas’ net cash provided by operating activities in the first six months of 2024 was $850.3 million compared with $12.2 million in the year-ago period.
2024 Guidance
Southwest Gas anticipates the Natural Gas Distribution segment’s net income in 2024 to be in the range of $233-$243 million. The capital expenditure is expected to be $830 million for supporting customer growth, system improvements and pipe replacement programs.
Capital expenditure is expected to be $2.4 billion for 2024-2026. The utility rate base is projected to witness a CAGR of 6.5-7.5%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -43.75% due to these changes.
VGM Scores
At this time, Southwest Gas has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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, Southwest Gas 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
Southwest Gas belongs to the Zacks Utility - Gas Distribution industry. Another stock from the same industry, Spire (SR - Free Report) , has gained 1.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Spire reported revenues of $414.1 million in the last reported quarter, representing a year-over-year change of -1.1%. EPS of -$0.14 for the same period compares with -$0.42 a year ago.
Spire is expected to post a loss of $0.45 per share for the current quarter, representing a year-over-year change of +42.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -20.8%.
Spire has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Why Is Southwest Gas (SWX) Up 0.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Southwest Gas (SWX - Free Report) . Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Southwest Gas 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 drivers.
Southwest Gas Q2 Earnings Lag Estimates, Revenues Down Y/Y
Southwest Gas Holdings Inc. recorded second-quarter 2024 operating earnings of 31 cents per share, which missed the Zacks Consensus Estimate of 43 cents by 27.9%. The bottom line also decreased 34% from the year-ago quarter’s figure of 47 cents.
Total Revenues
Operating revenues totaled $1.18 billion, which missed the Zacks Consensus Estimate of $1.23 billion by 3.9%. The top line also decreased 8.7% from $1.29 billion in the prior-year quarter.
Highlights of the Release
Utility infrastructure service expenses totaled $604.5 million, down 15.5% from the year-ago quarter’s level of $715.7 million.
The total operating income amounted to $33.1 million compared with $53.2 million in the year-ago quarter.
Total system throughput in the first six months of 2024 was 123.53 million dekatherms, down 8.3% from 134.77 million dekatherms in the first six months of 2023.
In April 2024, the company completed the initial public offering (IPO) of Centuri Holdings, Inc. common stock at $21 per share, along with a concurrent private placement of Centuri's common stock at a price per share equal to the IPO price. The final net proceeds of nearly $328 million were primarily utilized to repay amounts under Centuri's term loan and revolving credit facility, with the remainder for general corporate purposes.
Financial Highlights
Cash and cash equivalents, as of Jun 30, 2024, were $599.6 million compared with $106.5 million as of Dec 31, 2023.
The long-term debt, less current maturities, amounted to $5.06 billion as of Jun 30, compared with $4.61 billion as of Dec 31, 2023.
Southwest Gas’ net cash provided by operating activities in the first six months of 2024 was $850.3 million compared with $12.2 million in the year-ago period.
2024 Guidance
Southwest Gas anticipates the Natural Gas Distribution segment’s net income in 2024 to be in the range of $233-$243 million. The capital expenditure is expected to be $830 million for supporting customer growth, system improvements and pipe replacement programs.
Capital expenditure is expected to be $2.4 billion for 2024-2026. The utility rate base is projected to witness a CAGR of 6.5-7.5%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -43.75% due to these changes.
VGM Scores
At this time, Southwest Gas has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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, Southwest Gas 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
Southwest Gas belongs to the Zacks Utility - Gas Distribution industry. Another stock from the same industry, Spire (SR - Free Report) , has gained 1.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Spire reported revenues of $414.1 million in the last reported quarter, representing a year-over-year change of -1.1%. EPS of -$0.14 for the same period compares with -$0.42 a year ago.
Spire is expected to post a loss of $0.45 per share for the current quarter, representing a year-over-year change of +42.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -20.8%.
Spire has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.