Advertisement
Canada markets close in 2 hours 13 minutes

  • S&P/TSX

    21,974.87
    +89.49 (+0.41%)
     

  • S&P 500

    5,111.46
    +63.04 (+1.25%)
     

  • DOW

    38,300.73
    +214.93 (+0.56%)
     

  • CAD/USD

    0.7315
    -0.0008 (-0.11%)
     

  • CRUDE OIL

    83.85
    +0.28 (+0.34%)
     

  • Bitcoin CAD

    87,535.20
    -644.38 (-0.73%)
     

  • CMC Crypto 200

    1,328.11
    -68.42 (-4.90%)
     

  • GOLD FUTURES

    2,348.40
    +5.90 (+0.25%)
     

  • RUSSELL 2000

    2,004.49
    +23.37 (+1.18%)
     

  • 10-Yr Bond

    4.6750
    -0.0310 (-0.66%)
     

  • NASDAQ

    15,966.32
    +354.56 (+2.27%)
     

  • VOLATILITY

    15.06
    -0.31 (-2.02%)
     

  • FTSE

    8,139.83
    +60.97 (+0.75%)
     

  • NIKKEI 225

    37,934.76
    +306.28 (+0.81%)
     

  • CAD/EUR

    0.6837
    +0.0016 (+0.23%)
     
MARKETS LIVE BLOG:

STOCKS RISE, LED BY STELLAR ALPHABET, MICROSOFT EARNINGS

Latest stubborn U.S. inflation reading will bring about more 'wait and see' from the Fed

Xcel Energy Misses Earnings Estimates on Lower Revenues - Analyst Blog

Zacks Equity Research
Updated

Minneapolis-based Xcel Energy Inc. XEL recorded operating earnings of 46 cents per share in the first quarter of 2015, missing the Zacks Consensus Estimate of 50 cents by 8%. Quarterly earnings also declined 11.5% from the year-ago figure due to lower revenue contribution from electric and natural gas sales.

On a GAAP basis, quarterly earnings were 30 cents per share. The variance between operating and GAAP earnings was due to a 16 cent loss from the Monticello project.

Xcel Energy Inc. - Earnings Surprise | FindTheCompany

 

Total Revenue

Xcel Energy’s first-quarter revenues of $2,962.2 million also lagged the Zacks Consensus Estimate of $3,258 million by 9.1% and dropped 7.5% year over year. Lower revenues were largely due to a much milder winter this quarter as compared to a precipitous drop in temperatures in the year-ago period.

ADVERTISEMENT

Segment Revenue

Electric: Revenues from this segment in the quarter declined 3.3% year over year to $2,224.9 million.

Natural Gas: Quarterly revenues from the Natural Gas business also decreased 18.6% to nearly $716 million.

Other: Segment revenues of $21.4 million in the reported quarter increased a marginal 0.7% from the year-ago period.

Quarterly Highlights

Total operating expenses decreased 3.6% year over year to $2,611.4 million. The costs shrunk primarily due to cost of natural gas sold and transported and reduced expenses from electric fuel and purchased power.

Operating income for the quarter inched plunged nearly 29% year over year to $350.8 million.

Total interest charges and financing costs, after Allowance for funds used during construction ("AFUDC"), increased 7.2% year over year at the end of the first quarter of 2015 to $138.8 million.

Financial Update

Total debt as of Mar 31, 2015, was $12.7 billion out of which long-term debt was $11.5 billion.

In 2015, Xcel Energy plans to issue $500 million of senior unsecured bond. The company’s four subsidiaries collectively expect to issue first mortgage bonds worth $1,200 million.

2015 Guidance

Xcel Energy reiterated its 2015 earnings guidance in the range of $2.00–$2.15 per share.

On a weather-normalized basis, the company expects retail electric utility sales to increase 1% and natural gas sales to increase in the range of 0–1%.

Various operating expenses such as depreciation expense, property taxes and interest expense are expected to rise over 2014 levels.

The company anticipates delivering long-term annual earnings per share growth of 4–6% and targets a dividend payout ratio between 60–70%.

Other Utility Releases

American Electric Power Company Inc. AEP reported first-quarter 2015 operating earnings of $1.28 per share, beating the Zacks Consensus Estimate of $1.11 by 15.3%.

DTE Energy Co. DTE reported first-quarter 2015 operating earnings per share of $1.65, beating the Zacks Consensus Estimate of $1.49 by 10.7%.

NextEra Energy, Inc. NEE announced first-quarter 2015 adjusted earnings of $1.41 per share, beating the Zacks Consensus Estimate of $1.28 by 10.2%.

Our View

Owing to fluctuating weather patterns, the financial results of these utilities also tend to be volatile. Xcel Energy’s first-quarter 2015 results failed to impress with both earnings and revenues missing expectations.

In early 2015, Xcel Energy filed a resource plan with the Minnesota Public Utilities Commission proposing to reduce carbon emissions by 30% by 2020 and 40% by 2030. These aggressive targets will not only help in meeting state mandates but also assist the company in providing clean energy and reliable services to its customers.

Xcel Energy currently carries a Zacks Rank #3 (Hold).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
XCEL ENERGY INC (XEL): Free Stock Analysis Report
 
AMER ELEC PWR (AEP): Free Stock Analysis Report
 
NEXTERA ENERGY (NEE): Free Stock Analysis Report
 
DTE ENERGY CO (DTE): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research