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Xcel Energy (XEL) Beats on Q1 Earnings, Keeps 2016 View

Minneapolis-based Xcel Energy Inc. XEL recorded first-quarter operating earnings of 47 cents per share, surpassing the Zacks Consensus Estimate and the year-ago earnings by a penny.

Total Revenue

Xcel Energy’s first-quarter revenues of $2,772.3 million lagged the Zacks Consensus Estimate of $3,030 million by 8.5%. Revenues decreased 6.4% year over year due to lower contribution from its Electrical and Natural Gas segments.

Segment Revenue

Electric: Revenues decreased 1.8% year over year to $2,185.1 million.

Natural Gas: Quarterly revenues decreased 21.0% to nearly $565.7 million.

Other: Segment revenues of $21.5 million in the reported quarter increased 0.5% from the year-ago period.

Quarterly Highlights

Total operating expenses decreased 12.6% year over year to $2,282.4 million. Costs shrunk primarily due to lower cost of natural gas sold and transported and reduced expenses from electric fuel and purchased power.

Operating income in the reported quarter increased 39.6% year over year to $489.9 million.

Financial Highlights

Total debt as of Mar 31, 2016, was $14 billion, out of which long-term debt was $13.1 billion.

2016 Guidance

Xcel Energy maintained the 2016 operating earnings guidance in the range of $2.12–$2.27 per share and projects long-term earnings growth of 4–6% per year.

Xcel Energy expects retail electric utility sales to grow 0.5% and natural gas sales to remain flat.

Peer Releases

NiSource Inc. NI reported first-quarter 2016 operating earnings of 60 cents per share, surpassing the Zacks Consensus Estimate of 58 cents by 3.4%.

PPL Corporation PPL reported first-quarter 2016 adjusted earnings of 67 cents per share, falling short of the Zacks Consensus Estimate of 75 cents by 10.7%.

Edison International EIX reported first-quarter 2016 results, wherein adjusted earnings of 82 cents per share came in below of the Zacks Consensus Estimate of 89 cents by 7.9%.

Zacks Rank

Xcel Energy currently has a Zacks Rank #4 (Sell).

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