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Why Is OGE Energy (OGE) Down 4.3% Since Last Earnings Report?

A month has gone by since the last earnings report for OGE Energy (OGE). Shares have lost about 4.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is OGE 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 its most recent earnings report in order to get a better handle on the important drivers.

OGE Energy Q2 Earnings Miss Estimates, Sales Down Y/Y

OGE Energy’s second-quarter 2020 earnings of 51 cents per share missed the Zacks Consensus Estimate of 55 cents by 7.3%. The bottom line, however, improved 2% from 50 cents registered in the year-ago quarter.

Including one-time items, the company reported GAAP earnings of 43 cents per share compared with earnings of 50 cents in the year-ago quarter.


OGE Energy’s operating revenues of $503.5 million declined 2% from $513.7 million in the prior-year quarter. The year-over-year downside was primarily due to lower revenues from contracts with customers.

Operational Highlights

Total sales in the reported quarter amounted to 6.8 million megawatt-hours (MWh), lower than 6.9 million MWh in the prior-year quarter. Meanwhile, the company’s customer count inched up 1.15% to 863,264.

Cost of sales summed $137.4 million compared with $178.7 million in the prior-year quarter.

Total operating expenses rose 7% year over year to $240.7 million on account of higher depreciation and amortization expenses along with increased taxes.

Operating income grew 14% to $125.4 million from the year-ago quarter’s $110 million.

Interest expenses totaled $40.8 million in the second quarter, up from $35.9 million a year ago.

Other Highlights

OGE Energy reported net income of $86 million in the second quarter, down from the prior-year figure of $100 million.

OG&E: The segment’s net income increased 5.3% to $79 million from $75 million registered in the prior-year quarter. The primary driver for net income was the recovery of additional assets in service.

Natural Gas Midstream Operations: The segment posted second-quarter net income of $19 million compared with $27 million in the prior-year quarter. The decrease can be attributed to lower net income from Enable's gathering and processing business, resulting from reduced natural gas and crude oil gathered volumes and natural gas processed volumes.

2020 Guidance

OGE Energy updated its 2020 earnings in the range of $2.08-$2.18 per share. The Zacks Consensus Estimate for 2020 earnings is pegged at $2.11, lower than the midpoint of the guided range.


How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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