Integrys Energy Beats Earnings Ests

Zacks

Integrys Energy Group, Inc. (TEG) reported fourth-quarter 2013 pro forma earnings of 99 cents per share, beating the Zacks Consensus Estimate of 95 cents by 4.2%. Quarterly earnings also escalated 11.2% from the year-ago figure due to growth at the utility business.

GAAP earnings were $1.63 per share in the reported quarter compared with 86 cents per share in the fourth quarter of 2012. The difference between quarterly GAAP and pro forma earnings was due to a 64 cent per share gain from derivative and inventory accounting activities.

Integrys Energy’s earnings of $3.53 per share in 2013 were marginally above the Zacks Consensus Estimate of $3.50 and up 8.3% year over year. The upswing was primarily due to increased rate at The Peoples Gas Light and Coke Company.

Total Revenue

Integrys Energy's total revenue for the fourth quarter surged 42.9% year over year to $1.7 billion. Reported revenues also surpassed the Zacks Consensus Estimate by 31.5%. The revenue upturn reflects favorable returns from the company’s regulated as well as non-regulated business divisions.

Revenues of $5.6 billion in 2013 also surpassed the Zacks Consensus Estimate by 9.7% and increased by a good leap of 33.8% year over year.

Operating Results

Total retail throughput volumes from the regulated segment improved to 760.0 therms from 614.6 therms in the year-ago quarter. Retail electric sales volumes decreased to 3,924.9 Kilowatt-hours (“Kwh”) from 3,943.2 Kwh in the prior-year period. The decline was caused by lower sales in wholesale segment.

Cost continued to increase in the fourth quarter with operating expenses rising nearly 40.0% year over year to $1.4 billion. All the components of operating expenses rose with major expenses arising from non-regulates sales and purchase of fuel, natural gas and power.

Interest expense increased to $37.2 million during the quarter from $30.2 million in the year-ago period due to rising debt levels.

Financial Update

Integrys Energy’s cash and cash equivalents were $22.3 million as of Dec 31, 2013, compared with $27.4 million as of Dec 31, 2012. As of Dec 31, 2013, long-term debt was nearly $3.0 billion compared with $1.9 billion as of Dec 31, 2012.

Net cash generated from operating activities during the year was $555.0 million compared with $569.0 million in 2012.

Capital expenditure in 2013 was $669.2 million versus $594.3 million 2012. Higher capital expenditure during the year led to a negative free cash flow of $114.2 million.

Guidance for 2014

Integrys Energy’s adjusted earnings expectation for 2014 lies in the band of $3.50–$3.75 per share. The company provided a GAAP earnings guidance for 2014 in the range of $4.10–$4.35 per share.

Other Releases

TECO Energy Inc. (TE) announced fourth-quarter 2013 operating earnings of 21 cents per share, in line with the Zacks Consensus Estimate.
 
American Electric Power Co., Inc. (AEP) posted fourth-quarter 2013 earnings from continuing operations of 19 cents per share, beating the Zacks Consensus Estimate by 58.3%.

DTE Energy Company (DTE) reported fourth-quarter 2013 operating earnings per share of $1.01, beating the Zacks Consensus Estimate by 4.1%.

Zacks Rank

Integrys Energy currently holds a Zacks Rank #2 (Buy).

Read the Full Research Report on TE
Read the Full Research Report on AEP
Read the Full Research Report on TEG
Read the Full Research Report on DTE


Zacks Investment Research

View Comments