Why Is Clearway Energy (CWEN) Down 5.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Clearway Energy (CWEN). Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Clearway Energy 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.
Clearway Energy Q2 Earnings Lag Estimates, Sales Top
Clearway Energy Inc. recorded earnings of 33 cents per share in the second quarter of 2023, missing the Zacks Consensus Estimate of 55 cents per share by 30.9%.
Revenues
Total revenues of $406 million surpassed the Zacks Consensus Estimate of $368 million by 10.3%. The top line also improved 10.3% from the year-ago quarter’s level of $368 million.
Highlights of the Release
Adjusted EBITDA for the quarter totaled $316 million compared with $366 million in the year-ago period.
Total operating expenses amounted to $257 million, up 1.6% from the prior-year quarter’s figure of $253 million. This was due to an increase in cost of operations.
Operating income came in at $149 million compared with the year-ago quarter’s $1,406 million.
CWEN incurred interest expenses of $55 million compared with $47 million in the prior-year period.
Financial Position
Clearway Energy had cash and cash equivalents of $547 million as of Jun 30, 2023, down from $657 million as of Dec 31, 2022.
Total liquidity as of Jun 30, 2023 was $1,430 million, up 15.2% from $1,366 million as of Dec 31, 2022.
Long-term debt as of Jun 30, 2023 was $6,708 million compared with $6,491 million as of Dec 31, 2022.
Net cash provided by operating activities in the first six months of 2023 totaled $209 million compared with $279 million in the corresponding period of 2022.
Guidance
Clearway Energy lowered its 2023 cash available for distribution (“CAFD”) guidance to the range of $330-$360 million from the previous value of $410, primarily due to weak renewable resource conditions in the current and previous quarters.
The company expects adjusted EBITDA in the range of $1,090-$1,120 million compared $1,170 million in the previous guidance. Cash from operating activities is anticipated to be in the range of $728-$758 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Clearway Energy has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. 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 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 these revisions indicates a downward shift. Notably, 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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Clearway Energy, Inc. (CWEN) : Free Stock Analysis Report
