Why is OGE Energy (OGE) up 0.9% since its last earnings report?

It has been about a month since OGE Energy’s (OGE) last earnings report. Shares rose about 0.9% in that time, underperforming the S&P 500.

Will the recent positive trend continue until the next earnings release, or will OGE Energy face a recession? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the company’s most recent earnings report in order to get a better handle on the important factors influencing the situation.

OGE Energy delays earnings estimates for the first quarter, revenues increase y/y

The company saw first-quarter 2024 earnings of 9 cents per share, missing the Zacks Consensus Estimate of 35 cents by 74.3%. That number also dropped 52.6% from the 19 cents per share reported in the year-ago quarter.

Revenue

OGE’s operating revenues of $596.8 million increased 7.1% from $557.2 million reported in the prior-year quarter. However, the top line missed the Zacks Consensus Estimate of $607 million by 1.7%.

Operational highlights

Total sales for the reported quarter were 7.4 million megawatt hours (MWh), compared to 7 MWh in the year-ago quarter. The company’s customer count increased by 1.1% to 899,871.

In the first quarter of 2024, fuel, purchased power and direct transmission costs 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 increased 3.7% to $290.6 million, primarily due to higher depreciation and other operating and maintenance expenses.

Operating income in the first quarter of 2024 was $74 million, down 3.3% from $76.5 million in the same quarter last year.

In the first quarter of 2024, interest expense was $60.2 million, up 25.9% from the $47.8 million reported a year ago.

Segment details

OGE energy reported first-quarter net income of $18.6 million, down 51.4% from $38.3 million in the prior quarter.

The OG&E Segment net income was $25.2 million, down 36.7% from $39.8 million a year earlier. This decline was primarily due to higher depreciation and interest costs due to a growing asset base.

Selected financial data

OGE’s cash and cash equivalents as of March 31, 2024 were $4.3 million compared to $0.2 million as of December 31, 2023.

Total long-term debt was $4.26 billion as of March 31, 2024, compared to $4.34 billion as of December 31, 2023.

In the first quarter of 2024, OGE generated cash from operations of $83 million, compared to $172.3 million a year earlier.

Guidelines 2024

OGE Energy maintained its earnings per share forecasts in 2024. The company still expects earnings in the range of $2.06-2.18 per share. The Zacks Consensus Estimate is $2.13, which is just above the midpoint of the company’s proposed range.

In the OG&E segment, OGE continues to expect earnings per share of $2.22.

How have estimates changed since then?

It turns out that estimate revisions have been trending upwards over the past month.

As a result of these changes, the consensus estimate moved by 15%.

VGM results

Currently, OGE Energy has a weak Growth Score of D, but its Momentum Score is performing much better at A. However, the stock is rated C on the value side, ranking in the middle 20% for this investing strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company show an upward trend, and the scale of this revision looks promising. Notably, OGE Energy carries a Zacks Rank of #4 (Sell). We expect a below-average rate of return on stocks in the coming months.

Industry player performance

OGE Energy belongs to the Zacks Utility – Electric Power industry. Another stock in the same industry, PSEG (PEG), has gained 5.6% over the past month. More than a month has passed since the company announced its results for the quarter ended March 2024.

In the most recent quarter, PSEG reported revenue of $2.76 billion, representing a year-over-year change of -26.5%. EPS of $1.31 in the same period compared to $1.39 a year ago.

PSEG is expected to report earnings per share of $0.75 for the current quarter, which would represent a year-over-year change of +7.1%. Over the past 30 days, the Zacks Consensus Estimate has moved -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 Rating of D.

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