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PNM Resources (PNM) Down 7.1% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research

It has been about a month since the last earnings report for PNM Resources (PNM). Shares have lost about 7.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is PNM Resources 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 drivers.

PNM Resources' Earnings Beat Estimates in Q3, Up Y/Y

PNM Resources reported third-quarter 2019 earnings of $1.29 per share, beating the Zacks Consensus Estimate of $1.26 by 2.4%. The bottom line increased 19.4% from year-ago quarter’s figure of $1.08. The uptick can be attributed to higher-than-normal temperatures that increased customer usage.

Total Revenues

The company generated total revenues of $433.6 million in third-quarter 2019, up 2.6% from $423 million in the year-ago quarter.

Highlights of the Release

Total expenses in the reported quarter amounted to $293 million, down 0.7% from the year-ago quarter’s expenses of $295 million.

Operating income in the reported quarter was $140.5 million, up 9.7% from operating income of $128 million in the year-ago quarter.

Guidance

The company affirmed its 2019 consolidated earnings per share guidance in the range of $2.05-$2.11, whose midpoint $2.08 is lower than Zacks Consensus Estimate of $2.09.


 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -11.43% due to these changes.

VGM Scores

Currently, PNM Resources has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, PNM Resources has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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