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Hawaiian Electric (HE) Misses on Q1 Earnings, Keeps View

Hawaiian Electric Industries Inc. HE reported adjusted earnings of 31 cents per share in the first quarter of 2016, missing the Zacks Consensus Estimate of 37 cents by 16.2%. Earnings also dropped 11.4% from the year-ago adjusted number of 35 cents.

Including after-tax merger-related costs associated with the pending merger with NextEra Energy, Inc. NEE and the spin-off of ASB Hawaii, the company’s earnings were 30 cents per share for first-quarter 2016, compared with 31 cents in the year-ago period.

Total Revenue

Total revenue in the reported quarter was $551 million, down 13.6% year over year. The top line declined primarily due to lower contribution from Electric Utility, partially offset by higher contribution from Bank.

Operating Statistics

Total expenses were down 15.2% year over year to $482.1 million. Total operating income was $68.9 million, down 0.9% mainly due to lower contributions from Electric Utility and Bank. Interest expenses amounted to $20.1 million, up from $19.1 million in the prior-year quarter.

Segment Details

Electric Utility: Segment revenues in the reported quarter were $482.1 million, down 15.9% year over year. Net income decreased 5.6% to $25.4 million from $26.9 million a year ago. The downside resulted primarily from higher depreciation expenses.

Banking: Segment revenues in the reported quarter were $68.8 million, up 7%. Net income came in at $12.7 million, down 5.9%.

Other: The segment reported a quarterly net loss of approximately $5.7 million, narrower than the year-ago loss of about $8.5 million.

Financial Update

Cash and cash equivalents as of Mar 31, 2016, were $334.7 million, up from $300.5 million as of Dec 31, 2015. Long-term debt, net other than bank, was $1,578.6 million, up from $1,578.4 million at 2015 end.

Guidance

Hawaiian Electric reaffirmed 2016 adjusted earnings per share in the range of $1.62–$1.75. The company also reiterated its rate base growth expectation of 3–4%.

The company continues to expect 2016 utility earnings in the range of $1.28 to $1.36 per share and bank earnings in the range of 50 cents to 54 cents per share.

Peer Releases

CMS Energy Corp. CMS reported first-quarter 2016 adjusted earnings per share of 59 cents, missing the Zacks Consensus Estimate of 68 cents by 13.2%. Quarterly earnings also plunged 19.2% from the year-ago figure of 73 cents.

DTE Energy Company DTE reported first-quarter 2016 operating earnings per share of $1.52, in line with the Zacks Consensus Estimate. Reported earnings, however, dropped 7.9% from the year-ago figure of $1.65.

Zacks Rank

Hawaiian Electric currently carries a Zacks Rank #3 (Hold).

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CMS ENERGY (CMS): Free Stock Analysis Report
 
HAWAIIAN ELEC (HE): Free Stock Analysis Report
 
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