Pinnacle West Capital Corporation PNW stunned investors by generating break-even earnings in the final quarter of 2023, defying the Zacks Consensus Estimate projecting a loss of 10 cents per share. A year prior, the company reported a loss of 21 cents, illuminating a stark contrast in their financial trajectory.
The upward trajectory continued with an increase in 2023 earnings to $4.41, marking a notable 3.52% growth from the $4.26 reported in 2022.
Revenue Realities
In a surprising turn of events, the sales for the quarter amounted to $0.99 billion, falling short of the Zacks Consensus Estimate by 2.2%. This slump in revenue was unexpected, denting the overall financial picture.
However, 2023 as a whole depicted a different story with total revenues reaching $4.69 billion, showcasing an impressive 8.6% climb compared to the $4.32 billion in 2022.
Pinnacle West Capital Corporation’s Stock Performance, Consensus, and EPS Revelation
Pinnacle West Capital Corporation price-consensus-eps-surprise-chart | Pinnacle West Capital Corporation Quote
Corporate Operations Unveiled
The operational landscape depicted a mixed bag with total operating expenses plummeting to $917.2 million, marking a 5.7% decrease from the previous year. This decline was attributed to reduced fuel and power purchase costs, somewhat offset by higher depreciation and amortization expenses.
Meanwhile, total operational and maintenance expenses witnessed a 3.6% increase, landing at $281.4 million. Despite this, operating income surged to $74.4 million, showcasing a remarkable 102.2% rise from the year-ago quarter. However, total interest expenses climbed to $96.1 million, representing a 23.4% increase from the prior-year period.
Financial Landscape
As of December 31, 2023, cash and cash equivalents stood at $4.95 million compared to $4.8 million a year earlier. Long-term debt decreased to $7.54 billion from $7.74 billion recorded in the same period in 2022. Net cash flow provided by operating activities in 2023 was $1.2 billion, slightly lower than the $1.24 billion reported the previous year.
Future Projections
Pinnacle West projects consolidated 2024 earnings to range between $4.60 and $4.80 per share. While the Zacks Consensus Estimate stands at $4.75, marginally above the mid-point of the company’s guided range. The company also anticipates investing $7.8 billion in the 2023-2026 period to fortify its operational capacities and expects a 1.5-2.5% increase in retail customers in 2024 from 2023 levels.
Zacks Rank Analysis
Currently holding a Zacks Rank #4 (Sell), Pinnacle West faces challenges in the rating landscape, possibly indicating areas for improvement and strategic adjustments in the future.
For further insights, explore the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performances Unveiled
Throughout the sector, notable performances include NextEra Energy, Inc. (NEE), Exelon Corporation (EXC), and Dominion Energy Inc. While NEE and EXC surpassed earnings expectations, D lagged, showcasing the nuanced dynamics in the industry landscape.
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