Advertisement
Canada markets open in 8 hours 16 minutes

  • S&P/TSX

    21,873.72
    -138.00 (-0.63%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • DOW

    38,460.92
    -42.77 (-0.11%)
     

  • CAD/USD

    0.7304
    +0.0007 (+0.09%)
     

  • CRUDE OIL

    82.94
    +0.13 (+0.16%)
     

  • Bitcoin CAD

    87,846.62
    -3,750.09 (-4.09%)
     

  • CMC Crypto 200

    1,390.39
    -33.71 (-2.37%)
     

  • GOLD FUTURES

    2,328.00
    -10.40 (-0.44%)
     

  • RUSSELL 2000

    1,995.43
    -7.22 (-0.36%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • NASDAQ futures

    17,452.00
    -212.50 (-1.20%)
     

  • VOLATILITY

    15.97
    +0.28 (+1.78%)
     

  • FTSE

    8,040.38
    -4.43 (-0.06%)
     

  • NIKKEI 225

    37,691.06
    -769.02 (-2.00%)
     

  • CAD/EUR

    0.6818
    -0.0001 (-0.01%)
     

Xcel Energy Tops Q4 Earnings, Revenues on Rate Hike - Analyst Blog

Zacks Equity Research
Updated

Xcel Energy Inc. (XEL) recorded operating earnings of 39 cents per share in the fourth quarter of 2014, outpacing the Zacks Consensus Estimate of 34 cents by 14.7%. Quarterly earnings also increased 30% from the year-ago figure on the heels of increased electric rates.

Earnings for 2014 were reported at $2.03 per share, ahead of the Zacks Consensus Estimate of $1.99. On a year-over-year basis, earnings escalated 4.1%.

Xcel Energy Inc. - Earnings Surprise | FindTheBest

 

Total Revenue

Xcel Energy’s fourth-quarter revenues of $2,928.6 million surpassed the Zacks Consensus Estimate of $2,876 million and increased 7.2% year over year.

ADVERTISEMENT

In 2014, revenues of $11.69 billion wereahead of the Zacks Consensus Estimate of $10.91 billion and were up 7.1% over the prior year.

Segment Revenue

Electric: Revenues from this segment in the quarter increased 6% year over year to $2,250.2 million.

Natural Gas: Quarterly revenues from the Natural Gas business escalated 11.7% to $657.3 million.

Other: Segment revenues of $21.2 million in the reported quarter increased 3.9% from $20.4 million in the year-ago period.

Quarterly Highlights

Total operating expenses climbed 5.5% year over year to $2,537.4 million. Increasing costs can primarily be attributed to a rise in electric fuel and purchased power, cost of natural gas sold and operation and maintenance expenses. These costs spiraled due to volatility in the price of natural gas, coal and uranium used in power generation.

Operating income surged 20.2% year over year to $391.3 million.

Total interest charges and financing costs, after Allowance for funds used during construction ("AFUDC"), decreased 14.7% year over year at the end of the fourth quarter 2014 to $20.9 million.

Financial Update

Total debt as of Dec 31, 2014, was $12.8 billion out of which long-term debt was $11.5 billion.

In Mar 2014, Xcel Energy issued $300 million of 4.30% first mortgage bonds due Mar 15, 2044. Again in May 2014, the company issued $300 million, 4.125% first mortgage bonds due May 15, 2044.

In Jun 2014, Xcel Energy issued $150 million, 3.30% first mortgage bonds due Jun 15, 2024. In the same month, Xcel Energy sold $100 million, 3.30% first mortgage bonds due Jun 15, 2024.

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 $1200 million.

2015 Guidance

Xcel Energy reiterated its 2015 earnings guidance in therange of $2.00–$2.15 per share. On a weather-normalized basis, the company expects retail electric utility sales to increase 1% while natural gas sales to decline 2%.

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

Other Utility Releases

American Electric Power Company Inc. (AEP) reported fourth-quarter 2014 operating earnings of 48 cents per share, missing the Zacks Consensus Estimate of 52 cents by 7.7%.

NextEra Energy, Inc. (NEE) announced fourth-quarter 2014 adjusted earnings of $1.03 per share, missing the Zacks Consensus Estimate by just a cent.

Unitil Corp. (UTL) reported fourth-quarter 2014 earnings of 69 cents per share, edging past the Zacks Consensus Estimate by 1 cent.

Our View

Xcel Energy posted impressive Q4 and 2014 numbers. The company surpassed both the top and bottom line estimates for the quarter as well as the full year. Fourth-quarter earnings at three of the four Xcel subsidiaries increased from the prior-year period primarily due to rate increase in their respective service areas.

Xcel Energy filed a resource plan with Minnesota Public Utilities Commission for the period 2016-2030 to reduce carbon emission by 40% from 2005 levels. The plan addresses inclusion of wind and solar energy in the company’s portfolio.

The environment-friendly initiative will help Xcel Energy to achieve its renewable energy target of 31.5% by 2020 set by the state of Minnesota.

Xcel Energy currently carries a Zacks Rank #2 (Buy).


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
 
UNITIL CORP (UTL): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research