Public Service Enterprise Group (PEG) Up 6.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for PSEG (PEG). Shares have added about 6.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Public Service Enterprise Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
PSEG Q4 Earnings Beat Estimates, Revenues Down Y/Y
Public Service Enterprise Group or PSEG reported fourth-quarter 2023 adjusted earnings of 54 cents per share, which beat the Zacks Consensus Estimate of 53 cents by 1.9%. However, earnings declined 15.6% from the prior-year reported figure.
The company reported quarterly GAAP earnings per share (EPS) of $1.10 in the fourth quarter of 2023 compared with $1.58 in the corresponding period of 2022.
For 2023, the company reported adjusted EPS of $3.48 compared with $3.47 in 2022. The full-year bottom line also beat the consensus estimate by a penny.
Total Revenues
Operating revenues in the fourth quarter totaled $2,605 million, which beat the Zacks Consensus Estimate of $2,005 million by 29.9%. The top line, however, declined 17% from the year-ago quarter’s $3,139 million.
For 2023, the company generated operating revenues worth $11.24 billion, up from $9.8 billion in 2022. The full-year top line also beat the consensus estimate of $10.64 billion.
Sales Volume
In the reported quarter, electric sales volumes totaled 9,082 million kilowatt-hours, while gas sales volumes came in at 946 million therms.
Under electric sales, residential sales volumes were 2,805 million kilowatt-hours, up 5% from the prior-year quarter’s figure. Its commercial and industrial sales volumes accounted for 6,181 million kilowatt-hours, registering a year-over-year decline of 5%.
Other sales amounted to 96 million kilowatt-hours, down 1% from the year-ago quarter’s level.
Total gas sales volumes witnessed a decrease of 9% in firm sales volumes and an increase of 13% in the non-firm sales volumes of gas from the year-ago quarter’s reported figure.
Highlights of the Release
The operating income came in at $692 million in the fourth quarter of 2023 compared with $964 million in the year-ago quarter, indicating a year-over-year decline of 28.2%. Total operating expenses were $1,913 million, down 12% from the year-ago quarter’s reported actuals.
Segmental Performance
PSE&G: This segment’s adjusted income totaled $296 million.
PSEG Power & Other: Adjusted operating loss amounted to $25 million compared with $34 million in the prior-year quarter.
Financial Update
The long-term debt (including the current portion of the long-term debt) as of Dec 31, 2023, was $20,233 million compared with $20,270 million as of Dec 31, 2022.
PSEG generated $3,806 million in cash from operations during 2023 compared with $1,503 million in the prior-year period.
2024 Guidance
The company reaffirmed its 2024 guidance. PEG continues to expect its adjusted earnings in the range of $3.60-$3.70 per share. The Zacks Consensus Estimate for earnings is currently pegged at $3.67 per share, above the midpoint of the company’s guided range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 6.39% due to these changes.
VGM Scores
Currently, Public Service Enterprise Group has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Public Service Enterprise Group has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Public Service Enterprise Group belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, PPL (PPL), has gained 0.6% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
PPL reported revenues of $2.03 billion in the last reported quarter, representing a year-over-year change of -11.3%. EPS of $0.40 for the same period compares with $0.28 a year ago.
PPL is expected to post earnings of $0.52 per share for the current quarter, representing a year-over-year change of +8.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +5.1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PPL. Also, the stock has a VGM Score of D.
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Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report
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