Why Is CMS Energy (CMS) Up 6.3% Since Last Earnings Report?

It has been about a month since the last earnings report for CMS Energy (CMS). Shares have added about 6.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is CMS 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 the most recent earnings report in order to get a better handle on the important catalysts.

CMS Energy’s Q2 Earnings & Revenues Miss Estimates

CMS Energy Corporation reported second-quarter 2019 adjusted earnings per share (EPS) of 33 cents, down 32.7% year over year. The bottom line also missed the Zacks Consensus Estimate of 44 cents by 25%.

Operational Performance

In the quarter under review, CMS Energy’s operating revenues summed $1,445 million, which missed the Zacks Consensus Estimate of $1,456 million by 0.8%. The top line also fell 3.2% on a year-over-year basis.

The company’s operating expenses declined 0.8% to $1,227 million in the quarter under review.

Operating income in the second quarter was $218 million, down 14.5% from $255 million in the year-ago quarter.

CMS Energy’s interest charges were $131 million, up 17% from $112 million in the year-ago period.

Financial Condition

CMS Energy had cash and cash equivalents of $312 million as of Jun 30, 2019, up from $153 million as of Dec 31, 2018.

As of Jun 30, 2019, total debt, capital leases and financing obligations (excluding securitization debt) were $12,135 million, up from $11,500 million as of Dec 31, 2018.

At the end of the first half of 2019, cash from operating activities amounted to $1,185 million compared with $1,416 million in the first half of 2018.

2019 Guidance

CMS Energy reaffirmed its adjusted earnings per share guidance of $2.47-$2.51 for 2019, indicating 6-8% growth from the year-ago quarter’s reported figure.

How Have Estimates Been Moving Since Then?

Estimates revision followed an upward path over the past two months.

VGM Scores

At this time, CMS Energy has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

CMS Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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