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Why Is WEC Energy (WEC) Down 0.9% Since Last Earnings Report?

It has been about a month since the last earnings report for WEC Energy Group (WEC). Shares have lost about 0.9% in that time frame, outperforming the S&P 500.

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

WEC Energy Beats Q2 Earnings Estimates, Ups 2022 View

WEC Energy Group delivered second-quarter 2022 earnings per share (EPS) of 91 cents, which beat the Zacks Consensus Estimate of 86 cents by 5.8%. The bottom line improved by 4.6% from the year-ago earnings of 87 cents per share. Second-quarter earnings were ahead of our estimates of 88 cents per share.

Revenues

Operating revenues of $2,127.9 million for the second quarter of 2022 topped the Zacks Consensus Estimate of $1,742 million by 22.2%. Also, WEC Energy’s top line grew 26.9% from $1,676.2 million in the year-ago quarter. . Second-quarter revenues were ahead of our estimates of $1,780.6 million.

Highlights of the Release

In the second quarter, the residential use of electricity rose 0.1% year over year. The electricity consumption by small commercial and industrial customers increased 0.7% year over year. The electricity used by large commercial and industrial customers, excluding iron ore mines, decreased by 2% on a year-over-year basis.

On a weather-normal basis, the retail deliveries of electricity in the second quarter, excluding the iron ore mine, increased by 0.3%.

Total operating expenses for the second quarter amounted to $1,719.7 million, up 31.5% from the year-ago quarter’s $1,307.4 million, due to an increase in property taxes and manufacturing costs.

Financial Position

As of Jun 30, 2022, WEC had cash and cash equivalents of $30.3 million compared with $16.3 million as of Dec 31, 2021.

As of Jun 30, 2022, WEC Energy had long-term debt of $13,523.4 million compared with $13,523.7 million as of Dec 31, 2021.

Net cash provided by operating activities for the first six months of 2022 was $1,762.6 million compared with $1,226.2 million in the year-ago period.

The capital expenditure in the first half of 2022 was $1,028.8 million compared with $1,010.1 million in the year-ago period.

Guidance

WEC Energy raised the earnings guidance range for 2022 to the $4.36-$4.40 per share band compared with the previously announced earnings guidance for 2022 in the range of $4.34-$4.38 per share. The midpoint of the new range is $4.38 per share, suggesting growth of 0.4% from the midpoint of the previously guided range. The Zacks Consensus Estimate for the same is $4.37, which is lower than the midpoint of the utility’s current guided range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -5.03% due to these changes.

VGM Scores

Currently, WEC Energy has an average Growth Score of C, however its Momentum Score is doing a bit 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, WEC Energy 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

WEC Energy belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, FirstEnergy (FE), has gained 0.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

FirstEnergy reported revenues of $2.82 billion in the last reported quarter, representing a year-over-year change of +7.5%. EPS of $0.53 for the same period compares with $0.59 a year ago.

FirstEnergy is expected to post earnings of $0.77 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 -0.2%.

FirstEnergy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.


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