On June 11, the California Public Utility Commission issued a scoping ruling to incorporate analysis of the $850 million of unrecovered spending in the GT&S case (Gas Transmission and Storage Rate Case), Barclays noted.
"This will likely delay a ruling to mid to late 2016 and reduce earnings per share in the interim as a result," analysts at Barclays said.
The firm lowered its 2015 EPS estimate to $3.08 from $3.68 and its 2016 earnings estimate to $3.53 from $3.83, while maintaining its 2017 estimate of $3.82 earnings per share, according to the analyst note.
PG&E, a holding company, has primary operating subsidiary of Pacific Gas and Electric Company (the Utility), which operates electric utility and natural gas utility in northern and central California.
Shares of PG&E are declining 0.92% to $49.78 in morning trading Monday.
Separately, TheStreet Ratings team rates PG&E CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PG&E CORP (PCG) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.3%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,080.00 million or 40.07% when compared to the same quarter last year. In addition, PG&E CORP has also modestly surpassed the industry average cash flow growth rate of 38.68%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- PG&E CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, PG&E CORP increased its bottom line by earning $3.04 versus $1.84 in the prior year. This year, the market expects an improvement in earnings ($3.61 versus $3.04).
- The debt-to-equity ratio is somewhat low, currently at 1.00, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that PCG's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.
- You can view the full analysis from the report here: PCG Ratings Report