Vista Corp. (VST) Missed Q4 earnings and revenue estimates

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This story originally appeared on Zacks

Vista Corp. (VST) exited with quarterly earnings of $1.45 per share, missing Zacks consensus estimate of $3.14 per share. That compares to a loss of $0.02 per share a year ago. These figures are adjusted for non-recurring items.

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This quarterly report represents a profit surprise of -53.82%. A quarter ago, this company was expected to post a profit of $1.52 per share when it actually produced a profit of $0.03, delivering a surprise of -98.03%.

Over the past four quarters, the company has been unable to exceed consensus EPS estimates.

Vista Corp., which is part of the Zacks Utility – Electric Power industry, reported revenue of $3.31 billion for the quarter ended December 2021, missing Zacks’ consensus estimate by 28.95%. That compares to revenues of $2.52 billion a year ago. The company has been unable to beat consensus revenue estimates over the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

Shares of Vistra Corp. have lost about 4.8% since the start of the year against a -10% decline in the S&P 500.

What’s next for Vista Corp.

While Vista Corp. has outperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable metric that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this earnings release, the trend in estimate revisions for Vistra Corp. Mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.42 on $3.54 billion in revenue for the upcoming quarter and $1.88 on $14.3 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, Utility – Electric Power is currently in the bottom 21% of over 250 Zacks industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Algonquin Power & Utilities (AQN), another stock in the same sector, has yet to report results for the quarter ended December 2021. Results are expected to be released on March 3.

The utility operator is expected to post quarterly earnings of $0.21 per share in its upcoming report, which is no change from the year-ago quarter. The consensus EPS estimate for the quarter has been revised up 2.4% in the past 30 days from the current level.

Algonquin Power & Utilities revenue is expected to be $594.36 million, up 20.7% from the year-ago quarter.

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