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Why Is Clearway Energy (CWEN) Up 12.1% Since Last Earnings Report?

Zacks Equity Research

A month has gone by since the last earnings report for Clearway Energy (CWEN). Shares have added about 12.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Clearway Energy 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.

Clearway Energy Q1 Loss Wider Than Expected, Sales Top

Clearway Energy Inc.  reported first-quarter 2020 loss of 24 cents per share, wider than the Zacks Consensus Estimate of a loss of 4 cents.
 
Total Revenues

The company's total revenues in first-quarter 2020 were $258 million, beating the Zacks Consensus Estimate of $232 million by 11.2%. Total revenues also improved 18.9% year over year.

Highlights of the Release

On Apr 20, Clearway Energy announced that it has entered into binding agreements with Clearway Group (CEG) that will enable the company to acquire and invest in a portfolio of renewable energy projects, as well as expand the clean power generation portfolio.

Total operating expenses in the first quarter amounted to $206 million, increasing 17% from the year-ago period.

Operating income was $52 million, up 26.8% from the year-ago level.

Interest expenses in the quarter were $167 million, increasing 65.3% year over year.

Financial Position

Clearway Energy had cash and cash equivalents of $110 million as of Mar 31, 2020, down from $155 million on Dec 31, 2019. Total liquidity as of Mar 31, 2020 was $633 million, which was $209 million lower than the Dec 31, 2019 level. The decline due to growth investments and redemption of the remaining balance of the 2024 senior notes in January 2020.

Long-term debt as of Mar 31, 2020 was $5,081 million, reflecting an increase of 2.5% from $4,956 million on Dec 31, 2019.

The company's net cash flow from operating activities during first-quarter 2020 was $84 million compared with $61 million in the comparable prior-year period.

Guidance

Clearway Energy reaffirmed its 2020 Cash Available for Distribution (CAFD) guidance of $310 million.

 

How Have Estimates Been Moving Since Then?

Estimates revision followed a flat path over the past two months. The consensus estimate has shifted 34.77% due to these changes.

VGM Scores

At this time, Clearway Energy has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Clearway Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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