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Why Is Evergy (EVRG) Up 1.1% Since Last Earnings Report?

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Zacks Equity Research
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A month has gone by since the last earnings report for Evergy Inc (EVRG). Shares have added about 1.1% in that time frame, outperforming the S&P 500.

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

Evergy's Q3 Earnings Miss Estimates, Sales Down Y/Y

Evergy, Inc. reported third-quarter 2019 operating earnings of $1.57 per share, lagging the Zacks Consensus Estimate of $1.59 by 1.26%. The bottom line improved 13.77% from the year-ago-quarter’s $1.38.

The upside in earnings was buoyed by higher gross margins, favorable weather driving demand for services, new retail rates and lower outstanding shares.

GAAP earnings in the reported quarter were $1.56 compared with $1.32 a year ago.

Total Revenues

Evergy’s total revenues came in at $1,577.6 million, missing the Zacks Consensus Estimate of $1,619 million by 2.5%. The top line dropped 0.3% from the year-ago-quarter’s $1,582.5 million.

Highlights of the Release

Total operating expenses in the third quarter was $1,038.9 million, down 1% from the year-ago-quarter’s $1,049.4 million owing to lower fuel and purchased power along with operating and maintenance costs.

Interest and related charges in the reported quarter was $90.8 million, up 1.9% from the year-ago level.

This year as of Sep 30, Evergy repurchased 27.5 million shares worth $1,628.7 million. Since the inception of the repurchase program, the company has bought back 43.9 million shares worth $2.7 billion.

Financial Update

Cash and cash equivalents as of Sep 30, 2019, were $50.1 million compared with $160.3 million as on Dec 31, 2018.

Long-term debt as of Sep 30, 2019, was $8,749.2 million compared with $6,636.3 million as on Dec 31, 2018.

Cash from operating activities in the first nine months of 2019 was $1,447.3 million compared with $1,191.6 million a year ago.

Guidance

Evergy reaffirmed its 2019 earnings per share guidance at the range of $2.80-$3.00.
 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, Evergy has a great Growth Score of A, 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 second quintile 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Evergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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