Pinnacle West (PNW) Up 10.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Pinnacle West (PNW). Shares have added about 10.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Pinnacle West 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 catalysts.
Pinnacle West Earnings Beat Estimates in Q1, Sales Down
Pinnacle West Capital delivered adjusted earnings per share of 27 cents in the first quarter of 2020, which beat the Zacks Consensus Estimate of 16 cents by 68.7%. In the year-ago quarter, the company had reported adjusted earnings of 16 cents. The bottom line reflects the impact of improved customer growth and cost management.
Total Revenues
In the quarter under review, total revenues of $661.9 million fell 10.6% on a year-over-year basis. The figure missed the Zacks Consensus Estimate of $748 million by 11.5%.
Operational Highlights
In first-quarter 2020, total operating expenses were $621.5 million, down 8.6% from the year-ago quarter’s tally.
Operating income declined 32.7% year over year to $40.4 million.
Interest expenses declined to $59.2 million from $60.6 million in the year-ago quarter.
Guidance
Management reaffirmed 2020 EPS in the range of $4.75-$4.95, whose mid-point of $4.85 is higher than the current Zacks Consensus Estimate of $4.68.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months. The consensus estimate has shifted 12.36% due to these changes.
VGM Scores
At this time, Pinnacle West has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Outlook
Pinnacle West has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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