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OGE Energy (OGE) Up 0.1% Since Last Earnings Report: Can It Continue?

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Zacks Equity Research
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A month has gone by since the last earnings report for OGE Energy (OGE). Shares have added about 0.1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is OGE Energy 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.

OGE Energy Q3 Earnings Top Estimates, Revenues Up Y/Y

OGE Energy Corp.’s third-quarter 2019 earnings of $1.25 per share outpaced the Zacks Consensus Estimate of $1.15 by 8.7%. The bottom line increased 22.5% from $1.02 registered in the year-ago quarter. The upside can be primarily attributed to higher contribution from OG&E — a regulated electric utility.

Revenues

OGE Energy’s operating revenues of $755.4 million increased 8.1% from $698.8 million in the prior-year quarter. The upside can be attributed to year-over-year higher revenues from residential, commercial, oilfield, public authorities and street light as well as system sales.

Operational Highlights

Total sales in the reported quarter amounted to 9 million megawatt-hours (MWh), higher than 8.5 million MWh in the prior-year quarter. Meanwhile, the company’s customer count inched up 1.2% to 855,904.

Cost of sales amounted to $234 million compared with $244.4 million in the prior-year quarter.

Total operating expenses rose 8.8% year over year to $247.1 million on higher operation and maintenance expenses, depreciation and amortization expenses as well as higher taxes other than income.

Operating income increased 20.7% to $274.3 million from the year-ago quarter’s $227.3 million.

Interest expenses totaled $39.6 million in the third quarter, up from $38.7 million in the prior-year quarter.

OGE Energy reported net income of $251 million in the third quarter, up from the prior-year quarter’s figure of $205 million.

Segment Details

OG&E: The segment’s net income improved 23.4% to $227.2 million from $183.9 million in the prior-year quarter.

Natural Gas Midstream Operations: The segment posted third-quarter net income of $28.59 million compared with $28.4 million in the year-ago quarter.

Guidance

Previously, OGE Energy expected 2019 earnings in the range of $2.05-$2.20 per share. Now, it expects 2019 earnings per share in the range of $2.24-$2.30, whose midpoint of $2.27 is higher than the Zacks Consensus Estimate of $2.15.

The company’s projected capital expenditure is $3.4 billion for 2019-2023 period.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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