FirstEnergy (FE) Up 1.1% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for FirstEnergy (FE). Shares have added about 1.1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is FirstEnergy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. FirstEnergy Misses on Q3 Earnings and Sales, Lowers '24 EPS ViewFirstEnergy reported third-quarter 2024 operating earnings of 85 cents per share, which lagged the Zacks Consensus Estimate of 95 cents by 6.6%.The bottom line decreased 3.4% from the year-ago figure of 88 cents. The year-over-year decline in earnings was due to significantly higher storm restoration costs in the third quarter and lower distribution revenues in Ohio as a result of the Electric Security Plan V order, partially offset by lower operating expenses.On a GAAP basis, the third-quarter earnings were 73 cents, flat year over year.Total Revenues of FirstEnergyOperating revenues of $3.73 billion missed the Zacks Consensus Estimate of $3.98 billion by 6.4%. The top line, however, increased 6.9% from $3.48 billion reported in the year-ago quarter.FE’s Segmental PerformanceDistribution Services and Retail Generation: Revenues from this segment totaled $3.07 billion, up 6.9% from the prior-year quarter’s level.Transmission:  Revenues from this segment amounted to $0.56 billion, up 9.4% from $0.51 billion reported in the prior-year quarter.Other:  Revenues from this segment amounted to $104 million compared with $110 million in the year-ago quarter.Highlights of FE’s Q3 EarningsTotal operating expenses were $3 billion, up 6.4% from the year-ago quarter’s level of $2.82 billion. The year-over-year increase in other operating expenses resulted in an overall increase in expenses, while the cost of fuel and purchased power was lower than the year-ago quarter.The company reported an interest expense of $276 million, down 4.5% from the prior-year level of $289 million.Total distribution deliveries increased 2.5% compared with the third quarter of 2023, reflecting cooling degree days that were 15% above last year.Ongoing improvement in the economic conditions in the five states FirstEnergy serves continues to create demand and boost the performance of the company.Financial Highlights of FEAs of Oct. 28, 2024, FE reported available liquidity of $6.03 billion, including cash and cash equivalents of $290 million.Long-term debt and other long-term obligations as of Sept. 30, 2024, totaled $21.6 billion compared with $22.89 billion as of Dec. 31, 2023.Net cash provided from operating activities for the first nine months of 2024 totaled $1.84 billion compared with $429 million in the year-ago period.FirstEnergy’s GuidanceFirstEnergy trimmed its 2024 earnings per share to the range of $2.61-$2.71 from the earlier band of $2.61-$2.81. The Zacks Consensus Estimate for the same is pegged at $2.70 per share, a tad higher than $2.66, the midpoint of the company’s guided range.FirstEnergy reaffirmed its long-term annual operating EPS growth rate of 6-8%. FE will continue with its capital investment plan of $26 billion for the 2024-2028 period.The company raised its 2024 capital investment to $4.6 billion from $4.3 billion, which reflects a 24% year-over-year increase in investments. How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.VGM ScoresCurrently, FirstEnergy has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, FirstEnergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerFirstEnergy is part of the Zacks Utility - Electric Power industry. Over the past month, Avangrid (AGR), a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended September 2024 more than a month ago.Avangrid reported revenues of $2.08 billion in the last reported quarter, representing a year-over-year change of +5.5%. EPS of $0.55 for the same period compares with $0.27 a year ago.Avangrid is expected to post earnings of $0.62 per share for the current quarter, representing a year-over-year change of -36.1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.Avangrid has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FirstEnergy Corporation (FE): Free Stock Analysis Report Avangrid, Inc. 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