Why Is Dominion Energy (D) Down 8% Since Last Earnings Report?

A month has gone by since the last earnings report for Dominion Energy (D). Shares have lost about 8% in that time frame, outperforming the S&P 500.

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

Dominion Energy Q4 Earnings Top, Revenues Miss Estimates

Dominion Energy Inc. reported fourth-quarter 2019 operating earnings of $1.18 per share, beating the Zacks Consensus Estimate of $1.16 by 1.7%. Operating earnings came near the midpoint of the company’s guided range of $1.10-$1.25 per share. The bottom line improved from the year-ago earnings of 89 cents per share, aided by strong contribution from its business units.

GAAP earnings were $1.32 per share compared with 97 cents in the year-ago quarter.

Total Revenues

Dominion Energy’s total revenues came in at $4,475 million, lagging the Zacks Consensus Estimate of $4,876 million by 8.2% but improving 33.1% from $3,361 million in the year-ago quarter.

Highlights of the Release

Total operating expenses increased 24% year over year to $3,134 million due to higher electric fuel and purchase gas prices, as well as an increase in operating and maintenance costs.

Interest and related charges in the reported quarter were $401 million, down 8.9% from the year-ago period.

Dominion Energy announced that it is committed to achieve net zero carbon dioxide and methane emissions from power generation and gas infrastructure operations by 2050.

Segment Details

Dominion Energy Virginia: Net income from this segment was $403 million, up 21% year over year.

Gas Transmission & Storage: The segment’s net income was $360 million, increasing 40.1% year over year.

Gas Distribution: Net income from this segment was $173 million, down 46.6% on a year-over-year basis.

Dominion Energy South Carolina: Net income from this segment was $98 million.

Contracted Generation: The segment’s net income was $114 million, which increased substantially from $5 million in the year-ago period.

Corporate and Other: The segment’s net loss was $160 million, wider than a loss of $121 million in the year-ago quarter.

Guidance

For first-quarter 2020, Dominion Energy expects operating earnings within $1.05-$1.25 per share. The company had reported earnings of $1.10 per share in the year-ago period. The midpoint of the above guided range is $1.15, higher than the current Zacks Consensus Estimate for the period of $1.10.

Dominion Energy initiated 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. Expected positive drivers for 2020 earnings include higher regulated investment across electric and gas businesses, as well as lower financing costs due to decrease in average debt balance. The midpoint of the above guided range is $4.425, higher than the current Zacks Consensus Estimate for the period of $4.35.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

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

Outlook

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