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Why Is FirstEnergy (FE) Down 5.2% Since the Last Earnings Report?
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It has been about a month since the last earnings report for FirstEnergy Corporation (FE - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted 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.
FirstEnergy Q1 Earnings Beat, Revenues Miss Estimates
Diversified energy company, FirstEnergy announced first-quarter 2017 operating earnings of $0.77 per share, beating the Zacks Consensus Estimate of $0.71 by 8.4%. Quarterly earnings were down 2.5% year over year.
Moreover, the figure surpassed the guidance range of $0.65–$0.75 per basic share provided by the company during the last quarter of 2016.
On a GAAP basis, FirstEnergy reported earnings of $0.46 per share, much wider than the prior-year earnings of $0.77.
Total Revenue
FirstEnergy generated total revenue of $3,552 million in first-quarter 2017, missing the Zacks Consensus Estimate of $3,612 million by 1.69%.
Reported revenues were also down 8.92% from $3,869 million reported a year ago. The top line declined primarily due to lower revenues from Competitive Energy Services.
Highlights of the Release
Total electric sales decreased by 530 thousand megawatt-hours (MWh), or 1.4% year over year. Residential sales decreased by 467 thousand MWh, or 3.3% while commercial sales fell 115 thousand MWh, or 1.1%. Industrial sales improved by 56 thousand MWh or 0.5% primarily on account of higher usage in the shale, gas and coal sectors.
For the first quarter, FirstEnergy incurred operating expenses of $ 2,978 million, down 3.7% from $ 3,093 million a year ago primarily owing to lower fuel and purchased power.
Operating income in the reported quarter stood at $ 574 million, down from $ 776 million in the prior-year quarter.
Financial Update
FirstEnergy's cash on hand as of Mar 31, 2017 was $164 million, down from $199 million as of Dec 31, 2016.
Cash from operating activities in first-quarter 2017 was $785 million, compared with $650 million in the year-ago quarter. Long-term debt and other long-term obligations as of Mar 31, 2017 were 17,762 million compared with $18,192 million as of Dec 31, 2016.
Guidance
FirstEnergy has provided operating earnings guidance for second-quarter and full-year 2017 in the range of $0.55–$0.65 and $2.70–$3.00, respectively.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. While looking back an additional 30 days, we can see even more upward momentum. There have been two upward revisions in the last two months.
At this time, FirstEnergy's stock has a nice Growth Score of 'B'. However, it lags a bit on the momentum front with a 'C'. 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.
Based on our scores, the stock is equally suitable for growth and value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Why Is FirstEnergy (FE) Down 5.2% Since the Last Earnings Report?
It has been about a month since the last earnings report for FirstEnergy Corporation (FE - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted 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.
FirstEnergy Q1 Earnings Beat, Revenues Miss Estimates
Diversified energy company, FirstEnergy announced first-quarter 2017 operating earnings of $0.77 per share, beating the Zacks Consensus Estimate of $0.71 by 8.4%. Quarterly earnings were down 2.5% year over year.
Moreover, the figure surpassed the guidance range of $0.65–$0.75 per basic share provided by the company during the last quarter of 2016.
On a GAAP basis, FirstEnergy reported earnings of $0.46 per share, much wider than the prior-year earnings of $0.77.
Total Revenue
FirstEnergy generated total revenue of $3,552 million in first-quarter 2017, missing the Zacks Consensus Estimate of $3,612 million by 1.69%.
Reported revenues were also down 8.92% from $3,869 million reported a year ago. The top line declined primarily due to lower revenues from Competitive Energy Services.
Highlights of the Release
Total electric sales decreased by 530 thousand megawatt-hours (MWh), or 1.4% year over year. Residential sales decreased by 467 thousand MWh, or 3.3% while commercial sales fell 115 thousand MWh, or 1.1%. Industrial sales improved by 56 thousand MWh or 0.5% primarily on account of higher usage in the shale, gas and coal sectors.
For the first quarter, FirstEnergy incurred operating expenses of $ 2,978 million, down 3.7% from $ 3,093 million a year ago primarily owing to lower fuel and purchased power.
Operating income in the reported quarter stood at $ 574 million, down from $ 776 million in the prior-year quarter.
Financial Update
FirstEnergy's cash on hand as of Mar 31, 2017 was $164 million, down from $199 million as of Dec 31, 2016.
Cash from operating activities in first-quarter 2017 was $785 million, compared with $650 million in the year-ago quarter. Long-term debt and other long-term obligations as of Mar 31, 2017 were 17,762 million compared with $18,192 million as of Dec 31, 2016.
Guidance
FirstEnergy has provided operating earnings guidance for second-quarter and full-year 2017 in the range of $0.55–$0.65 and $2.70–$3.00, respectively.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. While looking back an additional 30 days, we can see even more upward momentum. There have been two upward revisions in the last two months.
FirstEnergy Corporation Price and Consensus
FirstEnergy Corporation Price and Consensus | FirstEnergy Corporation Quote
VGM Scores
At this time, FirstEnergy's stock has a nice Growth Score of 'B'. However, it lags a bit on the momentum front with a 'C'. 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.
Based on our scores, the stock is equally suitable for growth and value investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.