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PG&E (PCG) Up 4.8% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for PG&E (PCG - Free Report) . Shares have added about 4.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is PG&E 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 drivers.

PG&E Corp Q3 Earnings Miss Estimates, Revenues Up Y/Y

PG&E Corporation reported adjusted operating earnings per share of 24 cents in third-quarter 2021, which missed the Zacks Consensus Estimate of 26 cents by 7.7%. The bottom line however improved 9.1% from the year-ago quarter’s reported figure.

This upside in adjusted earnings can be attributed to the growth in rate base earnings, the change in shares, and wildfire mitigation costs above authorized.

Including one-time items, the company incurred GAAP loss of 55 cents per share against earnings of 4 cents in the prior-year quarter.

Revenue Update

PG&E Corp’s total revenues of $5,465 million rose 11.9% from the year-ago quarter’s $4,882 million. Revenues exceeded the Zacks Consensus Estimate of $5,232 million by 4.4%. This year-over-year upside was primarily driven by an increase in both Electric and Natural Gas sales.

Operational Highlights

Operating expenses in the reported quarter totaled $5,161 million, which increased 15.1% from $4,484 million in third-quarter 2020. The decline was due to higher costs of electricity, natural gas, as well as increased operation and maintenance along with wildfire fund expenses.

The company reported an operating income of $304 million compared with $398 million during the previous year’s third quarter.

Interest expenses in third-quarter 2021 totaled $399 million compared with $391 million in the year-ago period.

Guidance

On a non-GAAP basis, PG&E Corp. reaffirmed its guidance for 2021 core earnings in the range of 95 cents-$1.05 per share. The Zacks Consensus Estimate for 2021 earnings, pegged at 99 cents per share, lies just below the midpoint of the company’s guided range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 8% due to these changes.

VGM Scores

Currently, PG&E has a poor Growth Score of F, 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 D. 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, PG&E has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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