Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. This quarterly report represents an earnings surprise of -2.86%. A quarter ago, it was expected that this energy company would post earnings of $0.86 per share when it actually produce ...

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Financial Performance - CMS Energy reported earnings per share of $1.01 for Q1 2025, up from $0.96 in Q1 2024, with adjusted EPS at $1.02 compared to $0.97 in the previous year[1][2][12]. - The company reaffirmed its 2025 adjusted EPS guidance of $3.54 to $3.60, with long-term adjusted EPS growth projected at 6% to 8%[2][3]. - Operating revenue for Q1 2025 was $2.447 billion, an increase from $2.176 billion in Q1 2024, while operating income rose to $494 million from $412 million[12]. - Net income attributable to CMS Energy was $304 million for Q1 2025, compared to $287 million in Q1 2024, reflecting a year-over-year increase[12]. - The company reported net cash provided by operating activities of $1 billion for Q1 2025, compared to $956 million in Q1 2024[17]. Balance Sheet - Cash and cash equivalents increased to $465 million as of March 31, 2025, up from $103 million at the end of 2024[14]. - CMS Energy's total assets as of March 31, 2025, were $36.295 billion, an increase from $35.920 billion at the end of 2024[14]. - Current liabilities decreased to $1.920 billion as of March 31, 2025, down from $2.261 billion at the end of 2024[14]. Operational Goals - The company emphasized continued progress on customer investment projects in its electric and gas systems, supporting its operational and financial goals for 2025[3]. - Management views adjusted earnings as a key measure of the company's operating financial performance, using it for external communications with analysts and investors[20].

Core Insights - CMS Energy reported earnings per share of $1.01 for Q1 2025, an increase from $0.96 in Q1 2024, with adjusted earnings per share at $1.02 compared to $0.97 in the previous year [1][2][8] - The company reaffirmed its 2025 adjusted earnings guidance of $3.54 to $3.60 per share, with a long-term adjusted EPS growth target of 6 to 8 percent [2][3] - The CEO highlighted operational and financial progress, supported by a favorable electric rate case outcome and ongoing investments in electric and gas systems [3] Financial Performance - Operating revenue for Q1 2025 was $2.447 billion, up from $2.176 billion in Q1 2024 [7] - Operating expenses increased to $1.953 billion from $1.764 billion, resulting in operating income of $494 million, compared to $412 million in the prior year [8] - Net income attributable to CMS Energy was $304 million, up from $287 million, with diluted earnings per share at $1.01 compared to $0.96 [8][13] Cash Flow and Balance Sheet - Cash and cash equivalents increased to $465 million as of March 31, 2025, from $103 million at the end of 2024 [9] - Total assets rose to $36.295 billion from $35.920 billion, while total liabilities and equity also increased to $36.295 billion [9][10] - Net cash provided by operating activities was $1 billion, compared to $956 million in the previous year, while net cash used in investing activities rose to $918 million from $637 million [12]

Core Viewpoint - CMS Energy Corp. is expected to report its first-quarter 2025 results on April 24, with a focus on various factors influencing its performance, including weather conditions and revenue expectations [1][6]. Group 1: Weather Impact - The service areas of CMS experienced below-normal temperatures and moderate-to-heavy snowfall in the first two months of the quarter, likely increasing electricity demand for heating [2]. - However, above-normal temperatures in March may have reduced electricity demand, potentially moderating the overall revenue impact for the January-March 2025 quarter [3]. Group 2: Revenue and Earnings Expectations - The Zacks Consensus Estimate for CMS's sales is $2.29 billion, indicating a year-over-year growth of 5.4% [6]. - The consensus estimate for earnings is $1.11 per share, reflecting a year-over-year increase of 14.4% [6]. - Recent favorable rate hikes and cost reduction initiatives are expected to positively influence overall revenues and earnings [4]. Group 3: Operational Challenges - Severe weather conditions, such as an ice storm, may have caused infrastructure damage, leading to increased service restoration expenses that could negatively impact the bottom line [5]. Group 4: Earnings Prediction Model - The current model does not predict a definitive earnings beat for CMS, with an Earnings ESP of -5.75% and a Zacks Rank of 2 (Buy) [7][8].

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for CMS Energy, driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - CMS Energy is expected to report quarterly earnings of $1.11 per share, reflecting a year-over-year increase of +14.4% [3]. - Revenues are projected to be $2.29 billion, which is a 5.4% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from analysts [4]. - The Most Accurate Estimate for CMS Energy is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.75%, suggesting a bearish sentiment among analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with a strong predictive power for positive readings [7][8]. - CMS Energy's current Zacks Rank is 2, which complicates the prediction of an earnings beat despite the negative Earnings ESP [11]. Historical Performance - CMS Energy has consistently beaten consensus EPS estimates over the last four quarters, with a recent surprise of +1.16% when it reported earnings of $0.87 per share against an expectation of $0.86 [12][13]. Industry Comparison - FirstEnergy, another player in the electric power industry, is expected to report earnings of $0.59 per share, showing a year-over-year change of +7.3% [17]. - FirstEnergy's Earnings ESP is 0.85%, but its Zacks Rank of 4 (Sell) makes it difficult to predict an earnings beat [18].

Core Viewpoint - CMS Energy Corporation (CMS) presents a strong investment opportunity in the Zacks Utility Electric Power industry due to rising earnings estimates, strategic investments, robust return on equity (ROE), better solvency, and a strong dividend history [1] Growth Projections & Surprise History - The Zacks Consensus Estimate for CMS Energy's 2025 earnings per share (EPS) has increased by 0.3% to $3.60 per share over the past 60 days - The revenue estimate for CMS in 2025 is $8.07 billion, indicating a growth of 7.4% from the reported figure in 2024 - The company's long-term earnings growth rate is projected at 7.7%, with an average earnings surprise of 4.76% over the last four quarters [2] Return on Equity - CMS has a return on equity (ROE) of 12.02%, outperforming the industry average of 9.77%, indicating more efficient utilization of funds to generate returns [3] Solvency - The times interest earned (TIE) ratio for CMS Energy at the end of Q4 2024 was 2.5, suggesting the company can comfortably meet its interest payment obligations in the near term [4] Dividend History - CMS Energy has a quarterly dividend of 54.25 cents per share, leading to an annualized dividend of $2.17, with a current dividend yield of 3.02%, surpassing the Zacks S&P 500 Composite average of 1.38% [5] Systematic Investments - CMS plans to invest $20 billion in infrastructure upgrades and clean energy generation from 2025 to 2029, with $14.8 billion allocated to enhance gas infrastructure and electric distribution systems, improve customer satisfaction, minimize energy waste, and support clean energy transformation [6] Stock Price Performance - Over the past three months, CMS shares have increased by 7.8%, compared to the industry's growth of 4% [7]

Core Viewpoint - The utility sector is viewed as a safe investment during economic turbulence, providing essential services that consumers prioritize even in difficult times [1][7][8]. Group 1: Definition and Characteristics of Utility Stocks - Utility stocks are companies primarily involved in distributing essential services such as electricity, gas, and water [5][6]. - The Global Industry Classification Standard (GICS) categorizes the utility sector to include electric, gas, and water utilities, as well as independent power producers and energy traders [6]. - Utility companies exhibit low economic sensitivity, generating stable revenues and profits, and are known for their substantial dividends [8][9]. Group 2: Investment Appeal - Investors are drawn to utility stocks due to their "stickiness" in revenues, similar to healthcare and consumer staples, making them defensive stocks [7][8]. - Utilities are often among the best-yielding market sectors, providing safety and potential upside during market downturns [9]. - The sector's stability allows for gradual rate increases, although growth is typically capped at low single-digit rates [11]. Group 3: Recent Trends and Opportunities - The rise of artificial intelligence (AI) is expected to significantly increase power usage over the next decade, presenting a unique growth opportunity for utility companies [12][13]. - This trend may enable utilities to enhance their business results in a way that has not been seen before [13]. Group 4: Criteria for Selecting Utility Stocks - A quality screen for selecting utility stocks includes companies within the S&P Composite 1500, with a long-term estimated earnings-per-share growth rate of at least 5% [15]. - Stocks should have a dividend yield of at least 2.5%, with a history of growing dividends by at least 5% over the past year [16][17]. - Companies should have at least five covering analysts and a consensus Buy rating of 2.5 or less on S&P Global Market Intelligence's ratings scale [18][19]. Group 5: Recommended Utility Stocks - Recommended utility stocks include: - IDACORP (IDA): 2.9% yield, 5.5% estimated annual dividend growth, 8.3% long-term EPS growth, consensus rating 1.75 [19]. - NiSource (NI): 2.8% yield, 6.8% estimated annual dividend growth, 8.0% long-term EPS growth, consensus rating 1.53 [19]. - DTE Energy (DTE): 3.1% yield, 6.9% estimated annual dividend growth, 8.0% long-term EPS growth, consensus rating 2.05 [19]. - New Jersey Resources (NJR): 3.6% yield, 5.4% estimated annual dividend growth, 7.6% long-term EPS growth, consensus rating 2.22 [19]. - CMS Energy (CMS): 2.9% yield, 5.8% estimated annual dividend growth, 7.3% long-term EPS growth, consensus rating 2.21 [19]. - Sempra (SRE): 3.7% yield, 5.6% estimated annual dividend growth, 7.0% long-term EPS growth, consensus rating 2.11 [19]. - Ameren (AEE): 2.6% yield, 6.3% estimated annual dividend growth, 6.9% long-term EPS growth, consensus rating 2.24 [19]. - Public Service Enterprise Group (PEG): 3.1% yield, 5.7% estimated annual dividend growth, 6.6% long-term EPS growth, consensus rating 2.35 [19]. - Essential Utilities (WTRG): 3.2% yield, 6.6% estimated annual dividend growth, 6.5% long-term EPS growth, consensus rating 1.46 [19]. - FirstEnergy (FE): 4.1% yield, 5.6% estimated annual dividend growth, 5.7% long-term EPS growth, consensus rating 2.39 [20].

Market Overview - Wall Street is anticipating a challenging start to the week, with fears of a repeat of the 1987 Black Monday, which saw a 22.6% market plunge [5][6] - Major indexes, including Dow, S&P 500, and Nasdaq, are expected to open 6% lower, potentially making last week's $6.6 trillion losses appear minor [6] Economic Impact - President Trump's recent tariffs have caused global market turmoil, leading to uncertainty among investors regarding future market reactions [6][7] - Trump stated he would not engage in trade deals until trade deficits are addressed, which may prolong market distress until clarity on the tariffs' economic impact is achieved [7] Investment Recommendations - In light of the current market conditions, investing in safe-haven stocks, particularly in the utilities sector, is advised [3][4] - Recommended utility stocks include: - **Avista Corporation (AVA)**: Expected earnings growth rate of 14%, Zacks Rank 1, beta of 0.38, and a dividend yield of 4.81% [9] - **CMS Energy Corporation (CMS)**: Expected earnings growth rate of 7.8%, Zacks Rank 2, beta of 0.34, and a dividend yield of 2.99% [11] - **Exelon Corporation (EXC)**: Expected earnings growth rate of 6.4%, Zacks Rank 2, beta of 0.39, and a dividend yield of 3.53% [13] - **Southwest Gas Holdings, Inc. (SWX)**: Expected earnings growth rate of 17.1%, Zacks Rank 2, beta of 0.50, and a dividend yield of 3.60% [15]

Group 1 - CMS Energy will provide its 2025 first quarter results along with a business and financial outlook on April 24, 2025, at 9:30 a.m. EDT [1] - A webcast of the presentation will be available on CMS Energy's website, and an audio replay will be accessible approximately three hours after the webcast [1] - The audio replay will be archived for 30 days in the "Investors" section of CMS Energy's website [1] Group 2 - CMS Energy is a Michigan-based energy company, with Consumers Energy as its primary business [2] - The company also owns and operates independent power generation businesses [2] - Additional information about CMS Energy can be found on its website, and email alert notifications can be signed up for in the Investor Relations section [2]