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FirstEnergy Second Quarter Earnings Preview
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FirstEnergy (NYSE:FE) will release its second quarter earnings on Tuesday, August 7, 2012. Analysts have become increasingly bearish on the company over the last month, with the consensus analyst estimate slipping from 66 cents a share to the current prediction of earnings of 64 cents a share.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Everything Investors Need To Know About Earnings
What to Expect: Whereas the consensus estimate was 67 cents three months ago, it has since fallen. Analysts are projecting earnings of $3.39 per share for the fiscal year.
FirstEnergy is expected to report revenue of $4.04 billion for the quarter, down by 0.5% from last year's figure of $4.06 billion. Revenue of $17.58 billion is expected for the fiscal year.
Company Performance: Revenue increases have been in the double digits for the past four quarters. It has risen by an average of 23.2%, with the biggest increase of 29.8% coming in the second quarter of the last fiscal year.
The past eight quarters have represented an increase in profit for the company; for the last four, it has seen an average of more than twofold growth in profit year-over-year.
The P/E ratio for FE is 18.5, above the industry average of 10.67. Usually, if a stock has a high P/E ratio, it indicates that the market expects the company to grow earnings quickly in the future. One of the most important estimates of stock market valuation is the price/earnings ratio (P/E ratio). A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: Understanding The P/E Ratio
The stock price has increased from $46.97 on May 4, 2012 to $50.14 over the past quarter. The stock price is currently at its 52-week high. FirstEnergy's best recent streak was when its price gained $2.13 per share between June 26, 2012 and July 2, 2012.
The Competition: FirstEnergy is a diversified energy company that operates through its subsidiaries: OE, CEI, TE, Penn, ATSI, JCP&L, Met-Ed and Penelec. Most analysts (nine of 15) give FirstEnergy a hold rating.
The company's closest competitor in the electric utilities industry is Southern (SO). Analysts are less optimistic about FirstEnergy than about Southern. One out of 16 analysts rate the latter a buy compared to six of 15 for the former.
Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Everything Investors Need To Know About Earnings
What to Expect: Whereas the consensus estimate was 67 cents three months ago, it has since fallen. Analysts are projecting earnings of $3.39 per share for the fiscal year.
FirstEnergy is expected to report revenue of $4.04 billion for the quarter, down by 0.5% from last year's figure of $4.06 billion. Revenue of $17.58 billion is expected for the fiscal year.
Company Performance: Revenue increases have been in the double digits for the past four quarters. It has risen by an average of 23.2%, with the biggest increase of 29.8% coming in the second quarter of the last fiscal year.
The past eight quarters have represented an increase in profit for the company; for the last four, it has seen an average of more than twofold growth in profit year-over-year.
The stock price has increased from $46.97 on May 4, 2012 to $50.14 over the past quarter. The stock price is currently at its 52-week high. FirstEnergy's best recent streak was when its price gained $2.13 per share between June 26, 2012 and July 2, 2012.
The Competition: FirstEnergy is a diversified energy company that operates through its subsidiaries: OE, CEI, TE, Penn, ATSI, JCP&L, Met-Ed and Penelec. Most analysts (nine of 15) give FirstEnergy a hold rating.
The company's closest competitor in the electric utilities industry is Southern (SO). Analysts are less optimistic about FirstEnergy than about Southern. One out of 16 analysts rate the latter a buy compared to six of 15 for the former.
by
Investopedia Staff
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