A month has gone by since the last earnings report for Spire (SR). Shares have lost about 7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Spire due for a breakout? 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 drivers.
Spire Q2 Earnings and Revenues Surpass Estimates
Spire Inc. reported second-quarter fiscal 2023 earnings of $3.70 per share, which beat the Zacks Consensus Estimate of $3.49 by 6%. The bottom line also improved 8.2% from the year-ago quarter’s figure of $3.42 per share.
Total revenues for the reported quarter were $1,123.4 million, which outpaced the Zacks Consensus Estimate of $901 million by 24.7%. The top line also improved 27.5% from $880.9 million in the year-ago quarter.
Highlights of the Release
Operating expenses totaled $863.1 million, up 35.8% from $635.7 million recorded in the prior-year period. This was due to an increase in natural gas purchased expenses, and higher operation and maintenance expenses.
Operating income came in at $260.3 million, up 6.1% from $245.2 million in the prior-year quarter.
Net interest expenses increased 71.6% year over year to $47.2 million.
Cash and cash equivalents as of Mar 31, 2023 were $6.9 million compared with $6.5 million as of Sep 30, 2022.
Long-term debt (less current portion) as of Mar 31, 2023 was $3,702.5 million compared with $2,958.5 million as of Sep 30, 2022.
Net cash provided by operating activities in the first six months of fiscal 2023 was $179.9 million compared with $155.1 million in the year-ago period.
Spire narrowed its fiscal 2023 net economic earnings guided range to $4.20-$4.30 per share from $4.15-$4.35 per share (prior guidance).
The company expects its 10-year capital investment to be $7 billion. This planned investment is expected to drive annual rate-base growth of 7-8%. Capital expenditure for fiscal 2023 is projected at $700 million, including Midstream expansion for Spire Storage.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted 62.5% due to these changes.
Currently, Spire has a nice Growth Score of B, though it is lagging a lot 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 top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Spire has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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