PSEG (PEG) Down 2.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for PSEG (PEG). Shares have lost about 2.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is PSEG 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.
PSEG Q2 Earnings Beat Estimates, Revenues Rise Y/Y
PSEG, reported second-quarter 2023 adjusted operating earnings of 70 cents per share, which beat the Zacks Consensus Estimate of 61 cents by 14.8%. Earnings also increased 9.4% from the prior-year reported figure.
The company reported quarterly GAAP earnings per share (EPS) of $1.18 in the second quarter of 2023 compared with 26 cents reported in the second quarter of 2022.
Total Revenues
Operating revenues came in at $2,421 million in the second quarter, which beat the Zacks Consensus Estimate of $2,025.6 million by 19.5%. The top line also increased by 16.6% from the year-ago quarter’s $2,076 million.
In the quarter, electric sales volumes were 8,796 million kilowatt-hours, while gas sales volumes were 528 million therms.
Under electric sales, residential sales volumes were 2,811 million kilowatt-hours, down 11% from the prior-year quarter figure. Its commercial and industrial sales volumes accounted for 5,914 million kilowatt-hours, registering a decline of 5% from the same period last year.
Other sales were 71 million kilowatt-hours, down 1% from the year-ago quarter figure.
Total gas sales volumes witnessed a decrease of 11% in firm sales volumes and a drop of 19% in the non-firm sales volumes of gas from the year-ago quarter figure.
Highlights of the Release
In the second quarter of 2023, the operating income came in at $794 million compared with the operating income of $296 million in the year-ago quarter, reflecting massive growth from the prior-year period. Total operating expenses were $1,627 million, down 8.6% from the year-ago quarter.
Segmental Performance
PSE&G:The net income was $341 million, up from $305 million in the prior-year quarter.
PSEG Power & Other: Adjusted operating earnings were $10 million compared with operating earnings of $15 million in the prior-year quarter.
Financial Update
The long-term debt (including the current portion of the long-term debt) as of Jun 30, 2023 was $19,666 million compared with $20,270 million as of Dec 31, 2022
PSEG generated $2,409 million in cash from operations during the six months ended Jun 30, 2023 compared with the $356 million generated in the prior-year period.
2023 Guidance
The company reaffirmed its 2023 guidance. PEG expects its adjusted operating earnings in the range of $1,700-$1,750 million and adjusted EPS in the range of $3.40-$3.50. The Zacks Consensus Estimate for earnings is currently pegged at $3.45 per share, in line with the midpoint of the company’s guided range.
PSEG expects its PSE&G adjusted operating earnings in the range of $1,500-$1,525 million for 2023. It anticipates PSEG Power & Other adjusted operating earnings in the band of $200-$225 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -6.09% due to these changes.
VGM Scores
At this time, PSEG has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, 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 F. 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 these revisions indicates a downward shift. Notably, PSEG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report
