Why Is NiSource (NI) Down 6.9% Since Last Earnings Report?
A month has gone by since the last earnings report for NiSource (NI). Shares have lost about 6.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is NiSource 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 catalysts.
NiSource's Q4 Earnings and Revenues Surpass Estimates
NiSource reported fourth-quarter 2022 operating earnings per share (EPS) of 50 cents, beating the Zacks Consensus Estimate by a penny and the year-ago quarter’s earnings by 28.2%, respectively.
On a GAAP basis, NiSource reported fourth-quarter 2022 EPS of 52 cents, compared with 36 cents reported in the year-ago quarter.
In 2022, earnings per share were $1.47, up 7.3% from the $1.37 reported in 2021.
Earnings per share in 2022 were within the guidance range of $1.44-$1.46.
Total Revenues
Operating revenues of $1,705 million surpassed the Zacks Consensus Estimate of $1,555 million by 9.6%. The top line increased 21% from the prior-year quarter.
In 2022, total revenues were $5,833.7 million, up 19.1% from year-ago level.
Highlights of the Release
Total operating expenses in the fourth quarter amounted to $1,339.1 million, up 19.7% from the year-ago quarter’s $1,118.5 million due to higher energy costs.
The operating income was $362.3 million, up 19.3% from the year-ago quarter’s figure of $303.8 million.
Net interest expenses in the reported quarter were $101.8 million, up 16.2% from the prior-year quarter’s figure of $87.6 million.
Financial Update
NiSource's cash and cash equivalents as of Dec 31, 2022, were $40.8 million, down from $84.2 million as of Dec 31, 2021. NiSource had $1.6 billion in net available liquidity as of Dec 31, 2022.
Long-term debts (excluding amounts due within a year) as of Dec 31, 2022, were $9,523.6 million compared with $9,183.4 million as of Dec 31, 2021.
Net cash flows from operating activities in 2022 were $1,409.4 million compared with $1,217.9 million in 2021.
Guidance
NiSource increased its 2023 non-GAAP net operating earnings guidance to the range of $1.54-$1.60 per share from the earlier range of $1.50-$1.57 per share. The company expects earnings to witness a CAGR of 6-8% from 2021 through 2027.
NiSource expects to invest $15 billion in the 2023-2027 time period and expects its 2023 capital expenditure to be in the range of $3.3-$3.6 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 8.55% due to these changes.
VGM Scores
Currently, NiSource has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise NiSource has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
NiSource is part of the Zacks Utility - Electric Power industry. Over the past month, Consolidated Edison (ED), a stock from the same industry, has gained 0.2%. The company reported its results for the quarter ended December 2022 more than a month ago.
Con Ed reported revenues of $4.03 billion in the last reported quarter, representing a year-over-year change of +18%. EPS of $0.81 for the same period compares with $1 a year ago.
For the current quarter, Con Ed is expected to post earnings of $1.64 per share, indicating a change of +11.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Con Ed. Also, the stock has a VGM Score of B.
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