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Why Is PPL (PPL) Up 2.4% Since Last Earnings Report?

A month has gone by since the last earnings report for PPL (PPL). Shares have added about 2.4% in that time frame, outperforming the S&P 500.

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

PPL Q2 Earnings and Revenues Outperform Estimates, Rise Y/Y

PPL Corporation reported second-quarter 2022 operating earnings per share (EPS) of 30 cents, which surpassed the Zacks Consensus Estimate of 29 cents by a 3.4%. The bottom line also improved by 57.9% from the year-ago earnings of 19 cents per share.

On a GAAP basis, PPL Corporation recorded an EPS of 16 cents, up 433.3% from the year-ago quarter figure of 3 cents per share.

Revenues

Total revenues of $1,696 million surpassed the Zacks Consensus Estimate of $1,432 million by 18.4%. The top line improved by 31.7% from the year-ago figure of $1,288 million.

Highlights of the Release

Total operating expenses for the second quarter amounted to $1,453 million, up 42.7% from the year-ago quarter’s $1,018 million, due to an increase in other operating and maintenance expenses by 38.6%.

The operating income was $243 million, down 10% from the year-ago figure of $270 million.

Interest expenses were $118 million, down 75.1% from the year-ago figure of $474 million.

Segment Update

Kentucky Regulated: Adjusted earnings were 14 cents per share, up 27.3% from the year-ago quarter’s figure.

Pennsylvania Regulated: Adjusted earnings were 17 cents per share, up 30.8% from the year-ago quarter’s figure.

Rhode Island Regulated: Adjusted earnings for the second quarter were 1 cents per share.

Corporate and Other: The segment incurred a loss of 2 cents per share for the quarter, lower than the year-ago quarter’s loss of 5 cents.

Financial Position

As of Jun 30, 2022, PPL had cash and cash equivalents of $336 million compared with $3,571 million on Dec 31, 2021.

The long-term debt was $12,153 million as of Jun 30, 2022 compared with $10,666 million as of Dec 31, 2021.

Net cash provided by operating activities in the first six months of 2022 was $979 million compared with $1,521 million in the year-ago period.

Guidance

PPL Corporation reaffirmed 2022 EPS in the range of $1.30-$1.45. The Zacks Consensus Estimate for 2022 earnings of $1.38 per share is on par with the midpoint of the guided range.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

The consensus estimate has shifted 6.41% due to these changes.

VGM Scores

Currently, PPL has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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

PPL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

PPL belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, CenterPoint Energy (CNP), has gained 1.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

CenterPoint reported revenues of $1.94 billion in the last reported quarter, representing a year-over-year change of +11.6%. EPS of $0.31 for the same period compares with $0.36 a year ago.

CenterPoint is expected to post earnings of $0.31 per share for the current quarter, representing a year-over-year change of -6.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.1%.

CenterPoint has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.


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