The Oklahoma City-based energy provider has been affected by lower natural gas prices, Jefferies said. The firm maintained its "hold" rating on the stock.
Jefferies also lowered its third quarter EPS estimate on OGE Energy by 5 cents to 90 cents per share and raised its fourth quarter EPS estimate by 5 cents to 30 cents per share.
"The main drivers of the year-over-year change in quarterly earnings are greater depreciation and amortization expenses at OG&E, and the impact of lower natural gas prices at OGE Holdings, partially offset by warmer weather and other income," Jefferies said.
Shares of OGE Energy were up by 1.42% to $29.23 in midday trading on Thursday.
Separately, TheStreet Ratings team rates OGE ENERGY CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate OGE ENERGY CORP (OGE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 36.99% is the gross profit margin for OGE ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.91% is above that of the industry average.
- Net operating cash flow has slightly increased to $166.20 million or 4.79% when compared to the same quarter last year. Despite an increase in cash flow, OGE ENERGY CORP's cash flow growth rate is still lower than the industry average growth rate of 22.05%.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electric Utilities industry and the overall market on the basis of return on equity, OGE ENERGY CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- The company, on the basis of change in net income 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 has decreased by 13.2% when compared to the same quarter one year ago, dropping from $100.80 million to $87.50 million.
- You can view the full analysis from the report here: OGE