OGE Energy (OGE) Up 7.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for OGE Energy (OGE). Shares have added about 7.5% 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 Beat, Revenues Increase Y/Y
OGE Energy reported third-quarter 2022 earnings of $1.31 per share, which increased 3.9% from the earnings of $1.26 in the year-ago quarter. Moreover, the bottom line surpassed the Zacks Consensus Estimate of $1.12 by 16.9%.
Revenues
OGE Energy’s operating revenues of $1,270.8 million surged 47% from $864.4 million in the prior-year quarter. The year-over-year upside was driven by higher revenues from contracts with customers.
Operational Highlights
Total sales in the reported quarter amounted to 9.4 million megawatt-hours (MWh), which increased from 8.9 MWh in the prior-year quarter. Meanwhile, the company’s customer count increased 1.2% to 886,915.
The cost of fuel, purchased power and direct transmission increased 104.1% to $673.8 million compared with $330.1 million in the prior-year quarter.
Total operating expenses increased 11.9% year over year to $279.1 million, driven by higher depreciation and amortization expenses and operation and maintenance expenses.
The operating income improved 11.6% to $317.9 million from the year-ago quarter’s $284.8 million.
Interest expenses totaled $42.2 million in the third quarter, up from $39.5 million a year ago.
Financial Highlights
OGE Energy reported a net income of $262.8 million in the third quarter of 2022, which increased from the prior-year quarter’s earnings of $252.5 million.
The OG&E segment’s net income improved 13.1% to $253.1 million in the third quarter from the $223.8 million reported in the third quarter of 2021. The improvement can be attributed to higher operating revenues, driven by more favorable weather and revenues from the recovery of capital investments.
The Natural Gas Midstream Operations segment posted a net income of $16.1 million compared with a net income of $30.8 million in the prior year. The deterioration was due to the elimination of OGE Energy's equity in the earnings of Enable in 2022, which was driven by the merger of Enable and Energy Transfer in December 2021.
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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