Financial Performance - Pinnacle West reported consolidated net income of $608.8 million, or $5.24 per diluted share, for full-year 2024, an increase from $501.6 million, or $4.41 per diluted share, in 2023[2]. - For Q4 2024, the company experienced a consolidated net loss of $6.8 million, or a loss of $0.06 per diluted share, compared to a net loss of $23,000 for the same period in 2023[3]. - The full-year 2024 results reflect an increase of approximately $107 million, driven by new customer rates, increased customer usage, and higher revenue from the Lost Fixed Cost Recovery adjustor mechanism[4]. - Net income attributable to common shareholders for the twelve months ended December 31, 2024, was $608,806, compared to $501,557 in 2023, marking a growth of 21.4%[24]. - Earnings per share (diluted) for the twelve months ended December 31, 2024, increased to $5.24 from $4.41 in 2023, an increase of 18.8%[24]. Revenue and Sales Growth - Operating revenues for the three months ended December 31, 2024, increased to $1,095,408 from $991,574 in 2023, representing a growth of 10.5%[24]. - Retail sales growth was 5.7% in 2024, with annual retail customer growth at 2.1%[7][8]. - APS anticipates average annual customer growth of 1.5% to 2.5% through 2027, contributing to expected retail electricity sales growth of 4% to 6% annually over the next three years[8]. Operating Income and Expenses - Operating income for the twelve months ended December 31, 2024, rose to $1,012,063, up from $824,640 in 2023, reflecting a year-over-year increase of 22.8%[24]. - Total operating expenses for the three months ended December 31, 2024, were $1,010,870, compared to $917,194 in 2023, indicating an increase of 10.2%[24]. - Interest charges for the twelve months ended December 31, 2024, were $425,742, up from $374,887 in 2023, reflecting a rise of 13.5%[24]. - Fuel and purchased power expenses for the twelve months ended December 31, 2024, increased to $1,822,566 from $1,792,657 in 2023, a rise of 1.7%[24]. Future Projections and Plans - For 2025, the company estimates consolidated earnings will be in the range of $4.40 to $4.60 per diluted share on a weather-normalized basis[15]. - APS plans to add 9,805 megawatts of renewable power, battery storage, and natural gas to the grid between 2025 and 2028, with over 90% being carbon-free[9]. Operational Metrics - The Palo Verde Generating Station achieved a capacity factor of 93.7% and exceeded 30 million MWh of net generation for the 16th consecutive year[9]. - The weighted-average common shares outstanding (diluted) for the twelve months ended December 31, 2024, were 116,232, compared to 113,804 in 2023, an increase of 2.1%[24]. - The company reported a net loss attributable to common shareholders of $6,827 for the three months ended December 31, 2024, compared to a loss of $23 in 2023[24]. - The company’s income (loss) before income taxes for the three months ended December 31, 2024, was $(2,531), compared to $7,070 in 2023, indicating a decline[24].

Core Viewpoint - Pinnacle West Capital Corporation (PNW) is expected to report its fourth-quarter 2024 results on February 25, with a consensus estimate indicating a loss of 15 cents per share and revenues of $1.06 billion, reflecting a year-over-year increase of 6.6% [1][6]. Group 1: Factors Influencing Q4 Performance - The company's top-line performance is anticipated to benefit from retail customer growth and an increase in retail electricity sales, alongside robust commercial load growth driven by data centers [3]. - Arizona Public Service's (APS) Energy Management System is expected to enhance the integration of renewable and energy storage assets, positively impacting the company's quarterly performance [4]. - However, a planned outage in the fourth quarter may have led to higher operations and maintenance expenses, with increased depreciation, amortization, and property taxes potentially offsetting some positive factors [5]. Group 2: Earnings and Revenue Estimates - The Zacks Consensus Estimate for total electric sales is projected at 7,617.83 gigawatt-hours, which is a 0.9% increase from the previous year [6]. - The company's Earnings ESP is currently at 0.00%, indicating no prediction of an earnings beat for this quarter [7]. - Pinnacle West Capital holds a Zacks Rank of 3, suggesting a neutral outlook [8].

Core Insights - Pinnacle West (PNW) is currently viewed as a more attractive investment option compared to Centuri Holdings (CTRI) for those seeking undervalued stocks [1][7] Valuation Metrics - PNW has a forward P/E ratio of 18.07, significantly lower than CTRI's forward P/E of 39.01, indicating that PNW may be undervalued [5] - The PEG ratio for PNW is 3.24, while CTRI's PEG ratio stands at 10.93, suggesting PNW has a better earnings growth outlook relative to its price [5] - PNW's P/B ratio is 1.38, compared to CTRI's P/B of 3.31, further supporting the notion that PNW is a more favorable value investment [6] Earnings Outlook - PNW is experiencing an improving earnings outlook, which is a positive indicator in the Zacks Rank model, enhancing its attractiveness as a value stock [3][7]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators designed to help investors select stocks with the highest potential to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Value Score - The Value Score identifies attractive and discounted stocks using ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [3] Growth Score - The Growth Score emphasizes a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [4] Momentum Score - The Momentum Score focuses on trends in stock prices and earnings outlooks, using factors like one-week price change and monthly earnings estimate changes to identify high-momentum stocks [5] VGM Score - The VGM Score combines the three Style Scores to rate stocks based on their overall attractiveness in value, growth, and momentum, serving as a strong indicator alongside the Zacks Rank [6] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] Stock to Watch: Pinnacle West Capital Corporation - Pinnacle West Capital Corporation, based in Phoenix, AZ, provides electricity services in Arizona and is involved in electricity generation, transmission, and distribution [11] - The company holds a 2 (Buy) rating on the Zacks Rank and has a VGM Score of B, indicating strong potential [11] - Pinnacle West has a Value Style Score of B, supported by a forward P/E ratio of 18.47, making it attractive to value investors [12] - The Zacks Consensus Estimate for Pinnacle West's fiscal 2024 earnings has increased by $0.23 to $5.13 per share, with five analysts revising their estimates upwards in the last 60 days, and the company has an average earnings surprise of 246.2% [12]

Core Viewpoint - Pinnacle West (PNW) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that revisions in earnings estimates are a powerful indicator of future stock performance [4][6]. - For Pinnacle West, the recent increase in earnings estimates reflects an improvement in the company's underlying business, which is expected to drive the stock price higher [5][8]. Earnings Estimate Revisions - Pinnacle West is projected to earn $5.14 per share for the fiscal year ending December 2024, marking a year-over-year increase of 16.6% [8]. - Over the past three months, the Zacks Consensus Estimate for Pinnacle West has risen by 7.6%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, highlighting their potential for superior returns [9][10]. - Pinnacle West's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a favorable outlook for near-term price movement [11].

Core Viewpoint - Pinnacle West Capital (PNW) is currently considered an attractive investment opportunity due to its strong value metrics and favorable Zacks Rank of 2 (Buy) with a Value grade of A [3][4]. Valuation Metrics - PNW has a Price to Cash Flow (P/CF) ratio of 4.98, significantly lower than the industry average of 11.47, indicating potential undervaluation [2][4]. - The stock's P/S ratio stands at 1.93, compared to the industry's average of 2.1, suggesting it is reasonably priced relative to its sales [6]. - PNW's Price to Book (P/B) ratio is 1.45, which is attractive when compared to the industry's average P/B of 2.41 [8]. Performance Trends - Over the past 52 weeks, PNW's P/CF has fluctuated between a high of 5.50 and a low of 3.98, with a median of 4.50, indicating stable cash flow performance [2]. - The P/B ratio has varied from a high of 1.64 to a low of 1.20, with a median of 1.39, reflecting consistent valuation metrics over the year [8]. Investment Strategy - Value investing remains a preferred strategy for identifying strong stocks, with investors focusing on key valuation metrics to find undervalued opportunities [5]. - The Zacks Rank system emphasizes earnings estimates and revisions, aiding in the identification of winning stocks [7].

Core Viewpoint - Pinnacle West (PNW) is currently rated as a 2 (Buy) by Zacks Rank, indicating a positive outlook for the stock in the near term [1] Industry Overview - Pinnacle West is part of the Utility - Electric Power industry, which consists of 59 companies and ranks 77 in the Zacks Industry Rank [2] - The Utilities group has seen an average gain of approximately 15% year-to-date, with Pinnacle West outperforming this average [2] Company Performance - Pinnacle West has achieved a year-to-date gain of about 18.9%, surpassing the average gain of 11.2% for Utilities stocks [3] - Over the past 90 days, the Zacks Consensus Estimate for Pinnacle West's full-year earnings has increased by 7.6%, indicating improved analyst sentiment and a stronger earnings outlook [5] Peer Comparison - Southern Co. is another notable stock in the Utilities sector, with a year-to-date return of 18.1% and a consensus EPS estimate increase of 0.6% over the past three months, also holding a Zacks Rank of 2 (Buy) [8]

Utility - Electric Power Sector Analysis - Investors may consider Pinnacle West (PNW) or PSEG (PEG) in the Utility - Electric Power sector [1] - Value investors analyze traditional metrics to determine if a company is undervalued at its current share price [2] Company Rankings and Earnings Outlook - Pinnacle West has a Zacks Rank of 2 (Buy) while PSEG has a Zacks Rank of 3 (Hold) [3] - PNW has an improving earnings outlook due to positive revisions in earnings estimates [3] Valuation Metrics - Key metrics for value investors include P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] - PNW has a Value grade of B while PEG has a Value grade of D [5] - PNW's forward P/E ratio is 16.67 compared to PEG's 23.39 [7] - PNW's PEG ratio is 2.03 while PEG's is 3.15 [7] - PNW's P/B ratio is 1.45 compared to PEG's 2.66 [8] Investment Strategy - Pairing a strong Zacks Rank with an impressive Value grade can produce the best returns [6] - PNW has stronger estimate revision activity and more attractive valuation metrics than PEG [9]

Financial Data and Key Metrics Changes - The company reported earnings of $3.37 per share for Q3 2024, a decrease of $0.13 compared to the same quarter last year, attributed to higher O&M and depreciation expenses, financing costs, and income tax timing [21] - The updated 2024 earnings guidance is now in the range of $5 to $5.20 per share, with sales growth expectations adjusted to 4% to 6% for the year [23][24] - The forecasted O&M for the year has been increased to a range of $1.01 billion to $1.03 billion, and capital expenditure plans have been raised from $1.95 billion to $2.05 billion [24] Business Line Data and Key Metrics Changes - Weather-normalized sales growth for Q3 was 5.9%, with contributions from residential and both small and large commercial and industrial (C&I) customer groups [22] - C&I customer growth was particularly strong at 10.3% for the quarter, marking the third consecutive quarter with over 10% growth in this sector [22] - Retail customer growth was reported at 2.3% for the quarter, contributing to overall sales growth [22] Market Data and Key Metrics Changes - The company experienced a record-breaking summer with 70 days of temperatures exceeding 110 degrees, leading to an all-time peak energy demand of 8,210 megawatts on August 4 [9][10] - The demand from data centers and manufacturing sectors is expected to continue driving growth, with over 4,000 megawatts of extra high load factor customers currently committed [65][66] Company Strategy and Development Direction - The company is focused on long-term planning for resource adequacy, with a successful contract for the Redhawk power plant expansion expected to be in service by 2028, adding over 800 megawatts of generation and battery storage [13] - The capital plan through 2027 includes $9.65 billion of investments aimed at strengthening infrastructure and improving reliability [31] - The company aims to balance investment, cost recovery, and customer affordability while maintaining a strong financial position [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory, reaffirming a 5% to 7% EPS growth guidance based on the midpoint of the original 2024 guidance range [30] - The regulatory environment is expected to improve, with ongoing efforts to reduce regulatory lag and enhance cost recovery mechanisms [18][37] - The company anticipates robust customer growth in the range of 1.5% to 2.5% for 2025, driven by Arizona's attractiveness for residents and businesses [27] Other Important Information - The company has been actively involved in community support programs during extreme weather, increasing energy support and crisis bill assistance [15] - The customer care phone center has been ranked first nationally among peers in customer satisfaction [16] Q&A Session Summary Question: Impact of Elections on Regulatory Environment - Management indicated that the election results could lead to continued alignment with current regulatory efforts, particularly regarding the regulatory lag docket [41][43] Question: Load Growth and Large Customers - Management confirmed that load growth is expected to remain sticky, with ongoing interest from large customers, including data centers [45][46] Question: CapEx and Regulatory Lag - Management discussed the intentional increase in CapEx and the focus on reducing regulatory lag to improve returns on equity [53][56] Question: Data Center Demand Pipeline - The company reported over 4,000 megawatts of committed data center demand and an additional 10,000 megawatts in the planning process [65][66] Question: EPS Growth and Regulatory Lag - Management clarified that the 5% to 7% EPS growth guidance assumes improvements in regulatory lag, leading to smoother and more predictable earnings [72][74] Question: Inflation and O&M Costs - Management acknowledged inflationary pressures but emphasized disciplined O&M management to mitigate impacts in future rate cases [104][106]

Pinnacle West Capital Corporation (PNW) reported third-quarter 2024 earnings of $3.37 per share, which beat the Zacks Consensus Estimate of $3.35 by 0.6%. However, the bottom line decreased 3.7% from the year-ago quarter’s figure of $3.50.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Total Revenues of PNWSales for the quarter totaled $1.77 billion, which surpassed the Zacks Consensus Estimate of $1.68 billion by 5.2%. The top line also increased 7.9% from $1.64 billion recorded in ...