Volatile stock to watch: Avangrid Inc (NYSE: AGR)

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Avangrid Inc (NYSE: AGR) stock fell over 1.8% on 30th October, 2019 (as of 10:32 am GMT-4; Source: Google finance) as the company has posted lower than expected results for the third quarter of FY 19. On a non-U.S. GAAP adjusted basis, the company has reported the consolidated net income for the third quarter 2019 of $123 million, compared to $139 million, for the same period in 2018. The company has completed the sales of the Gas Storage and Trading businesses on May 1 and March 1, 2018, respectively.

During the third quarter, the ~201 MW Montague wind farm became fully operational and the company had announced the future repowering of the Klondike II wind farm in Oregon. The company  is investing in the electric and gas infrastructures, grow the Renewables pipeline, and execute asset sales/partnership transactions and the company have already secured power purchase agreements for more than 100% of the long-term outlook target through 2022. The company is also progressing on rate cases in New York and Maine including enhanced recovery mechanisms for outage restoration and staging costs.

AGR in the third quarter of FY 19 has reported the adjusted earnings per share of 40 cents, missing the analysts’ estimates for the adjusted earnings per share of 51 cents, according to Zacks Consensus Estimate. The company had reported the adjusted revenue of $1.49 billion in the third quarter of FY 19, missing the analysts’ estimates for revenue by 4.29%. Avangrid Networks’ earnings for the third quarter 2019 grew due to rate adjustments in Connecticut and Massachusetts and mid-period assessment achievements.

AGR has affirmed its consolidated non-U.S. GAAP earnings outlook for 2019 to be in the range of $2.25-$2.35 per share, however, has revised its earnings outlook for the business segments to reflect outage restoration and staging costs, increased personnel costs, expected earnings from asset sales/partnership transactions, and estimated taxes.

Meanwhile, AGR and PPL Corporation are in talks to combine their business of estimated value of $67 million, as per a report though it is unclear whether a deal would include an investment from Spanish utility Iberdrola, that is the world’s biggest wind power producer, which owns more than 80% of Avangrid. The deal would be ranked as the biggest utility tie-up in 2019 and could create one of the largest publicly traded utilities in the United States if it completes.

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