Eversource Energy Q4 Earnings, Revenues Miss the Estimates
Eversource Energy ES reported fourth-quarter 2015 operating earnings of 60 cents per share, 7.7% short of the Zacks Consensus Estimate and 16.7% lower than the year-ago figure.
Eversource Energy’s GAAP earnings were 57 cents per share in the fourth quarter of 2015, 17.4% lower than the year-ago quarter. The difference between GAAP and pro forma numbers was due to a one-time integration cost of 3 cents.
In 2015, earnings were $2.81 per share, missing the Zacks Consensus Estimate of $2.85 by 1.4%. Earnings per share were within the guidance range of $2.80–$2.85 per share.
Earnings improved by 6% over 2014. The bottom line was boosted by investments made by the company to improve its service reliability, progress made in addressing the region’s energy infrastructure challenges and the addition of natural gas heating customers.
Total Revenues
Eversource Energy’s fourth-quarter revenues of $1,691.2 million lagged the Zacks Consensus Estimate of $1,834 million by 7.8% and also declined from the year-ago level of $1,881.1 million by 10.1%.
In 2015, total revenues were $7,954.8 million, up 2.8% year over year.
Highlights of the Release
Operating expenses decreased nearly 10% year over year to $1,691.2 million due to lower Purchased Power, Fuel and Transmission expenses.
Operating income in fourth-quarter 2015 decreased 10.5% to $385.4 million from $430.3 million a year ago.
Total electricity distributed during 2015 increased marginally by 0.3% to 54,616 Gigawatt hours (Gwh), while natural gas distribution decreased by 1% to 98,458 million cubic feet (mmcf), primarily due to milder temperatures in December, which lowered natural gas sales.
Net income in 2015 excluding integration costs was $894.3 million compared with $841.6 Million in 2014.
2015 Segmental Performance
Electric Distribution and Generation: Earnings in the year increased 9.9% to $507.9 million, primarily due to higher distribution revenues and lower operations and maintenance expenses.
Electric Transmission: Segment earnings increased 3.1% to $304.5 million. The increase was attributable to a higher level of investment in Eversource Energy transmission facilities and a lower level of net charges related to reviews by the Federal Energy Regulatory Commission (FERC) of the authorized return on equity (ROE) for the owners of New England’s electric transmission system.
Natural Gas Distribution: This segment reported earnings of $72.4 million, marginally higher than the year-ago level of $72.3 million.
Parent & Other Companies: This segment reported earnings of $9.5 million in 2015, compared with $11.5 million in 2014.
Looking Ahead
Eversource Energy projects 2016 earnings per share between $2.90 and $3.05 and long-term earnings growth through 2019 of between 5% and 7%, taking 2015 as the base year.
The company narrowed its long-term earnings growth guidance range from 6% to 8% due to the impact of the extension of bonus income tax depreciation through 2019.
The company projects capital expenditure of $9.2 billion over the 2016 to 2019 time frame.
Other Company Releases
Dominion Resources Inc. D reported fourth-quarter 2015 operating earnings of 70 cents per share, missing the Zacks Consensus Estimate of 87 cents by 19.5%.
NextEra Energy NEE announced fourth-quarter 2015 adjusted earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.11 by 5.41.
American Electric Power Co., Inc. AEP reported fourth-quarter 2015 operating earnings of 48 cents per share, missing the Zacks Consensus Estimate of 50 cents by 4%.
Zacks Rank
Currently, Eversource Energy carries a Zacks Rank #4 (Sell).
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