Yahoo Finance Why Is OGE Energy (OGE) Up 0.9% Since Last Earnings Report?
It has been about a month since the last earnings report for OGE Energy (OGE). Shares have added about 0.9% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is OGE Energy 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 drivers.
OGE Energy Q1 Earnings Lag Estimates, Revenues Rise Y/Y
The company reported first-quarter 2024 earnings of 9 cents per share, which lagged the Zacks Consensus Estimate of 35 cents by 74.3%. The figure also declined 52.6% from 19 cents per share recorded in the year-ago quarter.
Revenues
OGE’s operating revenues of $596.8 million rose 7.1% from $557.2 million recorded in the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $607 million by 1.7%.
Operational Highlights
Total sales in the reported quarter were 7.4 million megawatt-hours (MWh), up from 7 MWh in the prior-year quarter. The company’s customer count increased 1.1% to 899,871.
During the first quarter of 2024, the cost of fuel, purchased power and direct transmission increased 15.8% to $232.2 million from $200.6 million in the prior-year quarter.
Total operating expenses for the first quarter of 2024 rose 3.7% to $290.6 million, primarily driven by higher depreciation and amortization expenses and other operation and maintenance expenses.
Operating income totaled $74 million in the first quarter of 2024, down 3.3% from the year-ago quarter’s level of $76.5 million.
For the first quarter of 2024, interest expenses totaled $60.2 million, up 25.9% from $47.8 million recorded a year ago.
Segment Details
OGE Energy reported a first-quarter net income of $18.6 million, down 51.4% from the prior-year quarter’s figure of $38.3 million.
The OG&E segment’s net income amounted to $25.2 million, down 36.7% from the year-ago period’s $39.8 million. This decrease was primarily driven by higher depreciation and interest expenses on a growing asset base.
Financial Highlights
OGE had cash and cash equivalents of $4.3 million as of Mar 31, 2024 compared with $0.2 million as of Dec 31, 2023.
Long-term debt totaled $4.26 billion as of Mar 31, 2024, down from $4.34 billion as of Dec 31, 2023.
During the first quarter of 2024, OGE generated cash from operating activities worth $83 million compared with the year-ago figure of $172.3 million.
2024 Guidance
OGE Energy reiterated its 2024 earnings per share guidance. The company still expects to generate earnings in the range of $2.06-$2.18 per share. The Zacks Consensus Estimate is pegged at $2.13, which lies just above than the midpoint of the company’s guided range.
For its OG&E segment, OGE still expects earnings to be at $2.22 per share.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 15% due to these changes.
VGM Scores
Currently, OGE Energy has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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. Notably, OGE Energy 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
OGE Energy belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, PSEG (PEG), has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
PSEG reported revenues of $2.76 billion in the last reported quarter, representing a year-over-year change of -26.5%. EPS of $1.31 for the same period compares with $1.39 a year ago.
PSEG is expected to post earnings of $0.75 per share for the current quarter, representing a year-over-year change of +7.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.
PSEG has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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