Why Is PNM Resources (PNM) Up 0.6% Since Last Earnings Report?
A month has gone by since the last earnings report for PNM Resources (PNM). Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is PNM Resources 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.
PNM Resources Q4 Earnings Top, Full-Year Revenues Fall
PNM Resources reported fourth-quarter 2023 earnings of 18 cents per share, which surpassed the Zacks Consensus Estimate of 15 cents by 20%. The company reported earnings of 15 cents per share in the prior-year quarter.
Full-year 2023 earnings of $2.82 per share increased 4.8% from the previous year’s figure of $2.69.
Total Revenues
Total 2023 revenues of $1.94 billion decreased 13.8% from $2.25 billion reported in 2022.
Segmental Details
PNM reported fourth-quarter earnings of 10 cents per share compared with 5 cents in the year-ago quarter. This was due to hotter temperatures, increased transmission margins due to higher system demand, fewer gas plant outages, and improved market performance of decommissioning.
TNMP recorded earnings of 25 cents per share, up 8.7% from the prior-year quarter’s figure. This improvement was due to increased rate recovery through the Transmission Cost of Service and Distribution Cost Recovery Factor mechanisms.
Corporate and Other incurred a loss of 17 cents per share, wider than the year-ago quarter’s reported loss of 13 cents. This was due to higher interest rates on variable rate debt, net of hedges and increased losses.
Highlights of the Release
Total operating expenses for 2023 were $1.71 billion, down 8% from $1.86 billion recorded in the previous year.
Total operating income for 2023 was $231.3 million, down 52.6% from $393.8 million registered in 2022.
Guidance
The company projected consolidated ongoing earnings in the range of $2.65-$2.75 per share for 2024. It also has a long???term earnings growth target of 6-7% through 2028 based on the 2024 guidance midpoint of $2.70. The Zacks Consensus Estimate for 2024 earnings is pinned at $2.75 per share, which is at the high end of the guided range.
The company plans to invest $6.1 billion in the 2024-2028 period to further strengthen its operations.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 83.78% due to these changes.
VGM Scores
At this time, PNM Resources has a subpar Growth Score of D, 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 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 this revision looks promising. Notably, PNM Resources has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
PNM Resources is part of the Zacks Utility - Electric Power industry. Over the past month, CMS Energy (CMS), a stock from the same industry, has gained 6.9%. The company reported its results for the quarter ended December 2023 more than a month ago.
CMS Energy reported revenues of $1.95 billion in the last reported quarter, representing a year-over-year change of -14.4%. EPS of $1.05 for the same period compares with $0.60 a year ago.
CMS Energy is expected to post earnings of $1.06 per share for the current quarter, representing a year-over-year change of +51.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -11.6%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for CMS Energy. Also, the stock has a VGM Score of C.
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