PPL Corp Drops 7.3% on Earnings Miss & Dividend Cut

Shares of PPL Corp. (NYSE: PPL) were down 7.25% on February 18, after the energy company reported mixed Q2 results, with revenues topping estimates but earnings falling short.

Investors were more disappointed by the dividend cut as the company announced a quarterly dividend of $0.20 per share, down 52% from $0.415 per share paid out for the prior quarter.

The dividend is payable on April 1 to shareholders on record as of March 10.

Q4 Numbers

Adjusted earnings of $0.22 per share fell ten cents short of analysts’ expectations of $0.32 per share, and were lower than the adjusted earnings of $0.23 per share reported for the prior-year period.

Meanwhile, revenues jumped 8.3% year-over-year to $1.49 billion and exceeded consensus estimates of $1.37 billion.

Update on Strategic Transformation

The company is in the middle of its strategic transformation with an aim to become an energy-focused company.

The company has already completed the sale of its former U.K. utility business. It now awaits approval for the planned acquisition of Narragansett Electric Company in Rhode Island from National Grid.

PPL will provide a comprehensive strategic update with details on its plan, including updated annualized dividend growth projections and earnings forecasts at an Investor Day, following the approval of the acquisition.

CEO Comments

PPL CEO, Vincent Sorgi, commented, “2021 was a significant year for PPL as we strategically repositioned the company for future growth and success.”

He further added, “With the sale of our U.K. business and the planned acquisition of Narragansett Electric, we are extremely excited about the future for our company, our customers, and our shareowners.”

Wall Street’s Take

Overall, the stock has a Hold consensus rating based on 5 Holds. At the time of writing, the PPL stock price projection was $31.40, which implies 20.31% upside potential from current levels.

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