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It has been about a month since the last earnings report for NiSource (NI). Shares have lost about 0.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NiSource due for a breakout? 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.
NiSource's Q2 Earnings Lag Estimates, Revenues Rise Y/Y
NiSource delivered net operating earnings of 13 cents per share in second-quarter 2021, missing the Zacks Consensus Estimate of 14 cents by a penny. The same came in line with the year-ago quarter’s figure.
On a GAAP basis, the company reported earnings of 11 cents per share against the loss figure of 5 cents in the year-ago quarter.
Total operating revenues of $986 million generated in the second quarter lagged the Zacks Consensus Estimate of $1,121 million by 12%. However, the top line improved 2.4% from $962.7 million reported in the year-ago quarter.
Highlights of the Release
Total operating expenses in the quarter under review fell 3.1% year over year to $843.8 million.
Net interest expenses in the reported quarter decreased 12.9% from the prior-year quarter’s figure to $84.5 million.
The utility received more than 180 proposals for the 2021 Integrated Resource Plan (IRP) process. Also, new gas base rate cases were filed in Ohio, Kentucky and Maryland in the reported quarter.
NiSource's cash and cash equivalents as of Jun 30, 2021 were $77.5 million, down from $116.5 million as of Dec 31, 2020.
Long-term debts (excluding amounts due within a year) as of Jun 30, 2021 were $9,201.6 million compared with $9,219.8 million as of Dec 31, 2020.
Net cash flows from operating activities in the first two quarters of 2021 were $703 million compared with $707.7 million in the comparable period of 2020.
In April, the company executed its plan to issue equity units worth $862.5 million.
NiSource reaffirmed its prior 2021 non-GAAP net operating earnings guidance in the range of $1.32-$1.36 per share. It expects earnings to see a CAGR of 7-9% from 2021 through 2024 including near-term annual growth of 5-7% through 2023.
For the ongoing year, it plans to spend in the band of $1.9-$2.1 billion. Through 2024, the utility anticipates investing $1.9-$2.2 billion annually in growth, safety and modernization along with $2 billion in renewable-generation assets. These investments are likely to improve rate base, which is likely to witness a CAGR of 10-12% for each of its businesses through 2024.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months.
At this time, NiSource has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
NiSource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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