Electric and multi-utility stocks covered by S&P Global Market Intelligence saw a modest recovery in the second quarter of 2020, after the sector grappled with market volatility toward the end of the first quarter.
Adjusted first-quarter earnings by energy and water utilities were up 2.9% year over year, a reflection that most utilities had not yet been significantly impacted by the pandemic. The electric sector posted the highest average earnings expansion for the first quarter, at 4.7%, while the multi-utility sector average was largely flat.
At the end of the second quarter, the S&P 500 Utilities Index rose 1.8%, the S&P 500 Electric Utilities Sub Index was virtually unchanged, and the Dow Jones Utility Index ticked up 1.5%.
Top-performing stocks
From being the worst-performing utility stock in the first quarter of 2020, CenterPoint Energy Inc. took the top-gainer spot after recording a 20.8% share price increase in the second quarter.
In May, CenterPoint secured a $1.4 billion equity investment and formed a board committee to evaluate potential strategic actions, although the company has said it is not yet exploring an outright sale.
The moves followed a tumultuous period at CenterPoint, which cut its dividend in April due to declining cash flow at Enable Midstream Partners, where it owns a 53.7% limited partner interest and 50% general partner interest.
Second on the top-performing list is NRG Energy Inc. which recorded a 19.4% share price gain over the quarter. NRG and Vistra Energy Corp., bolstered by their added retail exposure, stood out as high-performers during the first-quarter earnings season.
DTE Energy Co., whose share price increased 13.2% over the quarter, announced plans in April to cut certain costs to offset an estimated $60 million of earnings pressure in 2020 stemming from the coronavirus pandemic. The Detroit-headquartered multi-utility also expects the downturn in oil prices to benefit its gas storage and pipeline business.
Dominion Energy Inc.'s share price rose 12.5% during the quarter.
Even after winning a 7-2 victory at the U.S. Supreme Court in June, Dominion and Duke Energy Corp. on July 5 canceled the massive Atlantic Coast natural gas pipeline project, citing ongoing delays from legal and regulatory challenges and increasing cost uncertainty.
Public Service Enterprise Group Inc. saw its share price climb 9.5% in the second quarter. In May, PSEG and Exelon Corp. subsidiary Exelon Generation Co. LLC jointly proposed to New Jersey regulators an alternative to the state's participation in the PJM Interconnection capacity market.
Also on the list of top-performing utility stocks for the second quarter are Evergy Inc., Eversource Energy, PPL Corp., Sempra Energy and Xcel Energy Inc.
Bottom-performing stocks
Hawaiian Electric Industries Inc. emerged as the worst-performing stock during the period with a share price loss of 16.2%.
Its subsidiary Hawaiian Electric Co. Inc. in April reported a significant drop in electricity use across the islands as business activity and tourism ground to a halt following a March 23 stay-at-home order and subsequent visitor quarantine ordered by Hawaii Gov. David Ige.
In May, the company reported a 26.8% year-over-year drop in first-quarter net income. HEI President and CEO Constance Hee Lau said costs related to COVID-19 were relatively insignificant for the first quarter of 2020 but may increase in the next few quarters.
Avista Corp. saw its share price tumble 14.4% during the quarter.
The company lowered its consolidated 2020 earnings guidance to reflect regulatory items, expected net impacts from the COVID-19 pandemic, and losses at its nonutility businesses. Avista Utilities Inc. will also delay filing its rate cases in Washington and Oregon from midyear until the end of 2020.
Portland General Electric Co. recorded a share price decline of 12.8% in the second quarter. The company cut full-year 2020 earnings guidance, given the deteriorating economic outlook amid the coronavirus crisis.
Otter Tail Corp., whose share price fell 12.8% during the period, revised its 2020 EPS guidance mostly due to coronavirus impacts on its manufacturing platform.
Black Hills Corp.'s share price slid 11.5% during the quarter. Black Hills trimmed its earnings guidance expectations for 2020, citing "uncertainty regarding the length of shelter-in-place orders/recommendations and restarting the economy."
ALLETE Inc. saw shares decline 10.0% in the second quarter. The company temporarily suspended its 2020 earnings guidance due to the uncertainty of the effects of COVID-19 on the company's results of operations for the rest of 2020.
Other bottom-performing utility stocks during the second quarter include NiSource Inc., NorthWestern Corp., Consolidated Edison Inc. and Southern Co.