Notable Runner: CenterPoint Energy, Inc. (NYSE: CNP)

On Friday, Shares of CenterPoint Energy, Inc. (NYSE: CNP) gained 0.68% to $27.94. The stock opened its trade at $27.82 and after floating in a price range of $27.73 to $28.02; the stock grabbed the investor’s attention and traded 1.88M shares as compared to its average daily volume of 4.61M shares. The stock’s institutional ownership stands at 82.30%.

CenterPoint Energy, Inc. (CNP) recently stated net income of $165.0M, or $0.38 per diluted share, for the first quarter of 2018, contrast with $192.0M, or $0.44 per diluted share for the same period of the prior year. On a guidance basis, first quarter 2018 earnings were $0.55 per diluted share, consisting of $0.43 from utility operations and $0.12 from midstream investments. First quarter 2017 earnings on a guidance basis were $0.37 per diluted share, consisting of $0.27 from utility operations and $0.10 from midstream investments.

Operating income for the first quarter of 2018 was $251.0M, contrast with $291.0M in the first quarter of the prior year. The retrospective adoption of the accounting standard for compensation-retirement benefits (ASU 2017-07) resulted in a boost to operating income and a corresponding decrease to other income of $17.0M for the first quarter of 2017. Equity income from midstream investments was $69.0M for the first quarter of 2018, contrast with $72.0M for the first quarter of the prior year.

Business Segments

Electric Transmission & Distribution:

The electric transmission & distribution segment stated operating income of $115.0M for the first quarter of 2018, consisting of $99.0M from the regulated electric transmission & distribution utility operations (TDU) and $16.0M related to securitization bonds. Operating income for the first quarter of 2017 was $86.0M, consisting of $66.0M from the TDU and $20.0M related to securitization bonds.

Natural Gas Distribution:

The natural gas distribution segment stated operating income of $156.0M for the first quarter of 2018, contrast with $168.0M for the same period of 2017. Operating income benefited from rate relief, increased usage because of favorable weather and customer growth. These increases were more than offset by lower revenues reflecting the lower federal tax rate because of the TCJA, higher operation and maintenance expenses, higher taxes due mainly to the Minnesota property tax refund of $9.0M in 2017, and higher depreciation and amortization expenses.

Energy Services:

The energy services segment stated an operating loss of $26.0M for the first quarter of 2018, which included a mark-to-market loss of $80.0M, contrast with operating income of $35.0M for the same period in 2017, which included a mark-to-market gain of $15.0M.  Excluding mark-to-market adjustments, operating income was $54.0M for the first quarter of 2018 contrast with $20.0M for the same period of 2017. The increase in operating income was mainly because of incremental volumes from customers and improved margin rates, resulting from commercial opportunities attributable to recent acquisitions and from colder than normal weather in several U.S. regions.

Midstream Investments:

The midstream investments segment stated $69.0M of equity income for the first quarter of 2018, contrast with $72.0M in the first quarter of the prior year.

CNP has a market value of $12.04B while its EPS was booked as $1.50 in the last 12 months. The stock has 431.00M shares outstanding. In the profitability analysis, the company has net profit margin of 17.60%. Beta value of the company was 0.53; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.70.

Grover Beam

Grover Beam has over 14 years experience in the financial services industry giving him a vast understanding of how news affects the financial markets. He is an active day trader spending the majority of her time analyzing earnings reports and watching commodities and derivatives. He has a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

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