Why Is Evergy (EVRG) Down 0.5% Since Last Earnings Report?

It has been about a month since the last earnings report for Evergy Inc (EVRG). Shares have lost about 0.5% in that time frame, underperforming the S&P 500.

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

Evergy Beats Q3 Earnings Estimates, Narrows 2020 View

Evergy, Inc. reported third-quarter 2020 operating earnings of $1.73 per share, which surpassed the Zacks Consensus Estimate of $1.65 by 4.8%. The reported earnings were up 10.2% year over year due to higher residential demand, and lower operation and maintenance expenses, courtesy of persistent cost management as well as fewer shares outstanding.  

GAAP earnings for the reported quarter were $1.60 compared with $1.56 in the year-ago period.

Total Revenues

Evergy’s total revenues came in at $1,517.6 million, reflecting a decline of 3.8% from the year-ago-quarter’s $1,577.6 million.

Highlights of the Release

Total operating expenses were $995.9 million, down 4.1% from the year-ago quarter’s $1,038.9 million owing to lower fuel and purchased power, along with operating and maintenance costs.

Interest expenses for the reported quarter were $94.8 million, up 4.4% from the year-ago level.

Evergy, through the Sustainability Transformation Plan, is likely to make capital investment of $8.9 billion in the 2020-2024 time period, and reduce operation as well as maintenance expenses by $330 million through 2024 by effective cost management. Through this plan, the company is targeting dividend growth to be in line with earnings growth, with a payout range of 60-70%.

Financial Update

Cash and cash equivalents as of Sep 30, 2020 were $361.6 million compared with $23.2 million at 2019-end.

Long-term debt as of Sep 30, 2020 was $9,276.4 million compared with $8,746.7 million at 2019-end.

Cash from operating activities for the first nine months of 2020 was $1,421.7 million compared with $1,447.3 million in the prior-year comparable period.

Guidance

Evergy narrowed its 2020 operating earnings per share guidance to the range of $2.95-$3.10 from the prior expectation of $2.90-$3.10.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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