Why Is Dominion Energy (D) Up 11.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Dominion Energy (D). Shares have added about 11.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Dominion 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.

Dominion Energy Q1 Earnings & Revenues Lag Estimates

Dominion Energy Inc. reported first-quarter 2020 operating earnings of $1.09 per share, missing the Zacks Consensus Estimate by a penny. Operating earnings were lower than the midpoint of the company’s guided range of $1.05-$1.25 per share.

The bottom line also declined from the year-ago earnings of $1.10 per share. First-quarter 2020 earnings were negatively impacted by 9 cents due to milder-than-normal weather in its service territories.

GAAP loss was 34 cents per share compared with a loss of 84 cents in the year-ago quarter.

Total Revenues

Dominion Energy’s total revenues came in at $4,496 million, lagging the Zacks Consensus Estimate of $4,733 million by 5% but improving 16.5% from $3,858 million in the year-ago quarter.

Highlights of the Release

Total operating expenses decreased 10.9% year over year to $3,865 million due to lower electric fuel and energy-related purchases, as well as an increase in operating and maintenance costs.

Interest and related charges in the reported quarter were $490 million, up 4.5% from the year-ago period.

Segment Details

Dominion Energy Virginia: Net income from this segment was $429 million, up 18.8% year over year.

Gas Transmission & Storage: The segment’s net income was $221 million, decreasing 0.4% year over year.

Gas Distribution: Net income from this segment was $225 million, up 9.8% on a year-over-year basis.

Dominion Energy South Carolina: Net income from this segment was $94 million, up 32.4% year over year.

Contracted Generation: The segment’s net income was $59 million, down 42.1% year over year.

Corporate and Other: The segment’s net loss was $97 million, wider than a loss of $88 million in the year-ago quarter.

Guidance

For second-quarter 2020, Dominion Energy expects operating earnings within 75-85 cents per share. The company had reported earnings of 77 cents per share in the year-ago period. The midpoint of the above guided range is 80 cents, lower than the current Zacks Consensus Estimate for the period of 92 cents.

Dominion Energy reaffirmed its 2020 earnings guidance in the range of $4.25-$4.60 per share. The company had recorded earnings of $4.24 per share in 2019. The midpoint of the above guided range is $4.425, higher than the current Zacks Consensus Estimate for the period of $4.31.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -8.36% due to these changes.

VGM Scores

At this time, Dominion Energy has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Dominion 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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