Pinnacle West Beats Q4 Earnings & Revs
Pinnacle West Capital Corporation (PNW) reported adjusted earnings per share of 22 cents in fourth-quarter 2013, beating the Zacks Consensus Estimate by 15.8%. Quarterly earnings were 8.3% lower than the year-ago figure, primarily due to a reduction in number of residential cooling degree days in the Phoenix-metro area in Oct 2013, higher expenses for fuel and purchased power and a decline in retail electricity sales volume.
For 2013, the company’s adjusted earnings were $3.66 per share, surpassing the Zacks Consensus Estimate by 0.5%. Annual earnings increased 4.6% year over year.
Revenues
Pinnacle West’s quarterly revenues of $699.8 million surpassed the Zacks Consensus Estimate by 1.7%. Reported revenues edged up around 1% from the year-ago figure.
The company’s annual revenues were $3,454.6 million, marginally missing the Zacks Consensus Estimate of $3,456 million. Reported result increased 4.6% from the prior-year revenues of $3,301.8 million.
Operational Highlights
In the quarter under review, Pinnacle West’s total electricity sales volume decreased 5.5% year over year to 6,693 gigawatt-hour (“GWH”) mainly due to lower retail business sales volume and a drop in traditional contracts volume.
On the cost side, the company’s total operating expenses increased 4.1% year over year to $615.9 million, primarily due to higher expenses for fuel and purchased power, and operations and maintenance expenses.
Quarterly operating income decreased 17.2% to $83.9 million from the year-ago figure of $101.3 million.
Financials
As of Dec 31, 2013, Pinnacle West’s cash and cash equivalents were $9.5 million versus $26.2 million as of Dec 31, 2012.
Long-term debt (less current maturities), as of Dec 31, 2013, was $2,796.5 million compared with $3,199.1 million as of Dec 31, 2012.
Net cash provided by operating activities in 2013 was $1,153.3 million versus $1,171.1 million in the year-ago period.
For 2013, Pinnacle West’s capital expenditure increased around 14.2% to $1,016.3 million from $889.6 million in the year-ago comparable period.
Guidance
Pinnacle West retained its earnings guidance for 2014 in the range of $3.60 - $3.75 per share.
The company plans to achieve yearly growth of minimum 9.5% through 2015 for return on average common equity.
Peer Comparison
Exelon Corp. (EXC) announced fourth-quarter 2013 adjusted operating earnings of 50 cents per share, missing the Zacks Consensus Estimate by 5.7%.
Zacks Rank
Pinnacle West currently has a Zacks Rank #2 (Buy). Other players in the utility industry looking equally good at current levels include Wisconsin Energy Corp. (WEC) and CMS Energy Corp. (CMS). Each stock carries the same Zacks Rank as Pinnacle West.
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Read the Full Research Report on WEC
Read the Full Research Report on CMS
Read the Full Research Report on EXC
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