NiSource (NI) Down 10.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for NiSource (NYSE:NI). Shares have lost about 10.1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is NiSource due for a breakout? 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.

NiSource's Q4 Earnings Beat Estimates, Revenues Miss

NiSource delivered operating earnings of 45 cents per share in fourth-quarter 2019, beating the Zacks Consensus Estimate of 42 cents by 7.1%. The bottom line improved 18.4% from the year-ago quarter.

On a GAAP basis, the company reported a loss of 41 cents compared with a loss of 5 cents in the year-ago quarter.

In 2019, NiSource generated earnings of $1.32, up from $1.30 reported in 2018.

Total Revenues

NiSource generated total net revenues of $1,385.4 million in fourth-quarter 2019, which missed the Zacks Consensus Estimate of $1,511 million by 8.3%. Revenues declined from $1,453.1 million reported in the year-ago quarter.

In 2019, NiSource generated revenues of $5,184.1 million, up from $5,084 million in 2018.

Highlights of the Release

Total operating expenses in the quarter under review increased 1.8% year over year to $670.5 million.

Total interest expenses in the reported quarter were up 6% from the prior-year quarter’s figure to $93.3 million.

Financial Update

NiSource's cash and cash equivalents as of Dec 31, 2019 were $139.3 million, up from $112.8 million as of Dec 31, 2018.

Long-term debts (excluding amounts due within a year) as of Dec 31, 2019 were $7,856.2 million compared with $ 7,105.4 million as of Dec 31, 2018.

Net cash provided from operating activities in 2019 was $1,583.3 million compared with $540.1 million in 2018.

Guidance

NiSource expects long-term growth rate for earnings and dividend in the range of 5-7% annually with 2021 as the base year.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, NiSource has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 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, NiSource has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.