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A month has gone by since the last earnings report for Eversource Energy (ES). Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Eversource 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.
Eversource Q2 Earnings In Line, Revenues Miss Estimates
Eversource Energy reported second-quarter 2020 operating earnings of 76 per share, on par with the Zacks Consensus Estimate. However, the reported earnings improved 2.7% year over year. The year-over-year improvement in earnings was due to strong execution of its operations amid the pandemic.
Total Revenues
Second-quarter revenues of $1,953 million lagged the Zacks Consensus Estimate of $2,042 million by 4.4%. However, total revenues improved 3.7% from the year-ago figure of $1,884 million.
Highlights of the Release
Operating expenses decreased 12.3% year over year to $1,519.5 million. Operating income was up 187.4% from the prior-year quarter to $433.7 million. Interest expenses increased 1.2% year over year to $134.3 million.
Net income in the quarter under review was $252.2 million, up substantially from $31.4 million recorded in the year-ago period.
Segmental Performance
Electric Distribution: Earnings from this segment were $115 million, up 9.1% from the prior-year quarter. The upside was primarily attributed to higher revenues, partially offset by increased depreciation, operation and maintenance, as well as interest expenses.
Electric Transmission: Earnings of the segment were up 10.7% year over year to $129.5 million. The upside was due to increased investment in Eversource’s transmission facilities.
Natural Gas Distribution: This segment’s income was $3.3 million against a loss of $1.8 million in the year-ago quarter. The year-over-year improvement was due to higher revenues, partially offset by increased operation and maintenance expenses, as well as high depreciation costs.
Water Distribution: Earnings from this segment were $10.4 million, up 30% from $8 million in the year-ago quarter. The improved results were primarily due to higher revenues and lower depreciation expense.
Eversource Parent & Other Companies: The segment’s loss was $2.1 million against earnings of $7.3 million in the year-ago quarter.
Guidance
Eversource reaffirmed its 2020 earnings guidance in the range of $3.60-$3.70 per share. The midpoint of management’s 2020 EPS guidance is $3.65, which is higher than the current Zacks Consensus Estimate of $3.62 for the period.
The company expects long-term earnings to improve 5-7% from contribution from the existing core regulated businesses.
Eversource reiterated its capital expenditure view of $14.2 billion for the 2020-2024 time period.