A month has gone by since the last earnings report for PPL (PPL). Shares have added about 3.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is 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 Corp Posts In-Line Q3 Earnings, Tightens 2019 View
PPL Corporation (NYSE:PPL) reported third-quarter 2019 earnings per share of 61 cents, which matched the Zacks Consensus Estimate. The figure rose 3% year over year, primarily on strong operational performance from its Kentucky utilities.
On a GAAP basis, the company generated EPS of 65 cents compared with 62 cents in the year-ago quarter. The difference between GAAP and operating earnings stemmed from benefits in the U.K. Regulated segment.
Total Revenues
The company generated revenues worth $1,933 million in the third quarter, which improved 3.3% year over year from the year-ago quarter’s figure of $1,872 million.
Segment Results
U.K. Regulated: Adjusted earnings were 28 cents per share, down 2 cents from the prior-year quarter’s figure. Dilution of shares and lower sales volumes adversely impacted third-quarter earnings of the segment.
Kentucky Regulated: Adjusted earnings were 20 cents, up from 17 cents in the year-ago quarter. The upside can be primarily attributed to higher retail rates.
Pennsylvania Regulated: Adjusted earnings were 16 cents, flat year over year. The results benefited from return on additional capital investments in transmission offset by higher operation and maintenance expenses.
Corporate and Other: The segment incurred a loss of 3 cents in the quarter compared with 4 cents incurred in the year-ago quarter.
Operational Highlights
PPL Corp’s total operating expenses increased 1.8% year over year to $ 1,207 million in the quarter.
The company generated operating income of $726 million, improving 5.8% from $686 million in the prior-year quarter.
Interest expenses increased 6.2% to $259 million from the year-ago quarter’s figure of $244 million.
Financial Position
As of Sep 30, 2019, the company had cash and cash equivalents of $670 million compared with $621 million as of Dec 31, 2018.
Long-term debt (excluding debts due within a year) was $21,547 million as of Sep 30, 2019 compared with $20,069 million as of Dec 31, 2018.
Net cash flow from operating activities in the first nine months of 2019 was $1,888 million compared with $2,210 million in the year-ago period.
Guidance
PPL Corp tightened its earnings per share guidance for 2019. The company now expects earnings in the range of $2.35-$2.45 per share compared with the earlier range of $2.30-$2.50. The midpoint of the new earnings guidance is $2.40. The projected figure is lower than the current Zacks Consensus Estimate of $2.43.
How Have Estimates Been Moving Since Then?
Estimates review followed a flat path over the past two months.
VGM Scores
At this time, PPL has a subpar Growth Score of D, however its Momentum Score is doing a lot 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
PPL has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
PPL Corporation (PPL): Free Stock Analysis Report
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