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Xcel Energy (XEL) Up 5.6% Since Earnings Report: Can It Continue?

Zacks Equity Research

A month has gone by since the last earnings report for Xcel Energy Inc. XEL. Shares have added about 5.6% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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.

Xcel Energy Tops Q4 Earnings, Reaffirms ’17 Outlook

Xcel Energyrecorded fourth-quarter operating earnings of $0.45 per share, topping the Zacks Consensus Estimate of $0.44 by 2.3%. Reported earnings also improved 9.8% on a year-over-year basis.

Full-year earnings came in at $2.21, higher than both the Zacks Consensus Estimate of $2.20 and the year-ago tally of $2.09.

Total Revenue

Xcel Energy’s fourth-quarter revenues of $2,794.7 million missed the Zacks Consensus Estimate of $3,320 million by 15.8% but were up 5.6% from the prior-year quarter level of $2,645.8 million.

Full-year revenues amounted to $11,106.9 million, lagging the Zacks Consensus Estimate of $11,500 million. However, revenues were marginally up from $11,024.5 million in 2015.

Segment Results

Electric: Segment revenues increased from $2,170.2 million to $2,290.6 million in the reported quarter.

Natural Gas: Quarterly revenues grew 6.4% to $484.9 million.

Other: The segment raked in revenues of $19.2 million in the quarter, down 2.5%.

Quarterly Highlights

Total operating expenses increased 5.7% year over year to $2,329.3 million. Costs increased primarily due to higher depreciation and amortization, and higher electric fuel and purchased power

Operating income in the reported quarter increased 5.5% to $465.4 million.

Financial Highlights

Total debt as of Dec 31, 2016 was $14.9 billion, out of which long-term debt comprised $14.2 billion.

Looking Ahead

Xcel Energy has reiterated its 2017 operating earnings guidance in the range of $2.25–$2.35 per share.

The company projects a long-term annual earnings growth rate of 4–6%.

How Have Estimates Been Moving Since Then?

Fresh estimates have been on a downtrend over the past two months.

Xcel Energy Inc. Price and Consensus

 

Xcel Energy Inc. Price and Consensus | Xcel Energy Inc. Quote

VGM Scores

Currently, Xcel Energy stock has an average Growth Score of 'D', however its Momentum is doing a bit better with a 'B'. 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 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is more suitable for momentum investors than value investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.


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