It has been about a month since the last earnings report for Dominion Energy (D). Shares have lost about 3.5% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Dominion Energy 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 drivers.
Dominion's Q1 Earnings Lag Estimates, Revenues Up Y/Y
Dominion Energy Inc. reported first-quarter 2019 operating earnings of $1.10 per share, lagging the Zacks Consensus Estimate of $1.12 by 1.8%. However, operating earnings came within the company’s guided range of $1.05-$1.25 per share.
The reported figure was lower than the year-ago quarter by 3.5%. The year-over-year decrease was due to unusually mild weather in Virginia and South Carolina, which lowered earnings by six cents in the reported quarter.
GAAP earnings were 86 cents per share compared with 77 cents in the year-ago quarter.
Dominion’s total revenues came in at $3,858 million, lagging the Zacks Consensus Estimate of $4,614 million by 16.4% but improving 11.3% from $3,466 million in the year-ago quarter.
Highlights of the Release
Total operating expenses increased 67.5% year over year to $4,340 million due to higher electric fuel prices, and an increase in operating and maintenance costs.
Interest and related charges in the reported quarter were $469 million, up 49.4% from the year-ago period.
In the reported quarter, electric delivery customer base increased by 761,249 from the prior-year level. Electricity consumption volumes also improved 21.6% year over year to 26,958 gigawatt hour in the first quarter.
Power Delivery: Net income from this segment was $155 million, down 0.6% year over year.
Power Generation: The segment’s net income was $308 million, decreasing 11.5% year over year.
Gas Infrastructure: Net income from this segment was $359 million, up 9.8% on a year-over-year basis.
Southeast Energy: Net income from this segment was $132 million.
Corporate and Other: The segment’s net loss was $81 million compared with a loss of $90 million in the year-ago quarter.
Cash, restricted cash and cash equivalents as of Mar 31, 2019 were $422 million compared with $268 million on Dec 31, 2018.
Long-term debt as of Mar 31, 2019 was $32.04 billion compared with $26.32 billion at the end of 2018.
Cash from operating activities in first-quarter 2019 was $1.17 billion compared with $1.23 billion in the same period last year.
For second-quarter 2019, Dominion expects operating earnings within 70-80 per share compared with 86 cents in the year-ago period. The midpoint of the guided range is 75 cents, below the current Zacks Consensus Estimate for the period of 90 cents. The company expects Millstone refueling outage timing, share dilution and return to normal weather to significantly impact earnings during the second quarter.
For 2019, Dominion expects earnings per share in the range of $4.05-$4.40 compared with $4.05 recorded in 2018. The midpoint of the guided range is $4.225, below the current Zacks Consensus Estimate for the period of $4.18. Positive drivers for 2019 include commercial operation of the Cove Point Liquefaction project, the addition of the Southeast Energy Group operating segment and growth from regulated investment.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -10.5% due to these changes.
Currently, Dominion Energy has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Dominion Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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