NEW YORK (TheStreet) -- Shares of PPL (PPL - Get Report) fell 1.59% to $35.80 in late afternoon trading Wednesday ahead of the electric utility company's fourth-quarter earnings report before the market open Thursday.
The consensus estimate calls for PPL to report earnings of 51 cents a share on revenue of $3.48 billion. In the fourth quarter last year, the company posted EPS of 60 cents, which beat the consensus estimate of 50 cents, according to analysts polled by Thomson Reuters. Revenue totaled $2.848 billion, which came up short of analysts' expectations of $2.901 billion.
In the third quarter 2014, PPL reported EPS of 54 cents, which edged the consensus estimate of 52 cents. Revenue totaled $3.449 billion, which handily beat analysts' expectations of $2.831 billion.
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Separately, TheStreet Ratings team rates PPL CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PPL CORP (PPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.7%. Since the same quarter one year prior, revenues rose by 11.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- PPL CORP has improved earnings per share by 19.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PPL CORP reported lower earnings of $1.69 versus $2.61 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.69).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Electric Utilities industry average, but is greater than that of the S&P 500. The net income increased by 21.2% when compared to the same quarter one year prior, going from $410.00 million to $497.00 million.
- Currently the debt-to-equity ratio of 1.56 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.46, which clearly demonstrates the inability to cover short-term cash needs.
- You can view the full analysis from the report here: PPL Ratings Report