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Public Service Enterprise (PEG) Tops Q2 Earnings, Keeps View

Public Service Enterprise Group Inc. PEG or PSEG reported second-quarter 2017 adjusted operating earnings of 62 cents per share, which exceeded the Zacks Consensus Estimate of 57 cents by 8.8%. Earnings also improved 8.8% on a year-over-year basis.

Excluding one–time adjustments, the company reported quarterly earnings of 22 cents per share compared with 37 cents in the second-quarter 2016.

Total Revenue

Revenues of $2,133 million in the quarter missed the Zacks Consensus Estimate of $2,333 million by 8.6%. However, the figure increased 12% from the year-ago figure of $1,905 million.

During the reported quarter, electric sales volume declined 0.8% to 9,583 million kilowatt-hours. But gas sales volume declined 18.1% to 692 million therms.

For electric sales, results reflected a 0.8% drop in the commercial and industrial sector, 0.6% decline in residential sector, 9.2% fall in street lighting and 2.3% drop in interdepartmental sector.

Total gas sales volume in the reported quarter declined on 24.5% drop in non-firm sales volume of gas and 9.8% decline in firm sales volume of gas.

Highlights of the Release

During the second quarter, the company incurred operating income of $374 million down from $1,174 million in the year-ago quarter. Total operating expenses were $4,351 million, up 30% from the year-ago quarter figure.

Interest expenses in the reported quarter were $189 million, in-line with the year-ago level.

Segment Performance

PSE&G: Segment earnings were $507 million, up from $441 million in the prior-year quarter. Quarterly results reflect the continuing successful execution of its growth initiatives and control of operating expenses as well as the benefits of its expanded investment program.

PSEG Power: The segment suffered a loss of $267 million against earnings of $275 million a year ago. The downside was due to the impact of incremental depreciation and other expenses of $387 million, pre-tax, associated with the decision to retire the Hudson and Mercer coal/gas-fired generating stations announced on Jun 1, 2017.

PSEG Enterprise/Other: The segment incurred net loss of $17 million as against operating earnings of $36 million in the second quarter of 2016.

Financial Update

As of Jun 30, cash and cash equivalents were $430 million compared with $423 million as of Dec 31, 2016.

Long-term debt as of Jun 30 was $12,521 million, up from the 2016-end level of $11,395 million.

Public Service Enterprise Group generated $1,756 million in cash from operations in the first half of the year, up from the year-ago figure of $1,722.

2017 Guidance

The company maintained its 2017 guidance. Earnings are still projected in the range of $2.80–$3.00.

PSE&G’s operating earnings are still expected in the band of $945–$985 million. The company also reiterates PSEG Power operating earnings guidance at the $435–$510 million range.

PSEG Enterprise/Other’s operating earnings expectations are reaffirmed at $35 million.

Other Utility Releases

DTE Energy Company DTE reported second-quarter 2017 operating earnings per share (EPS) of $1.07, which surpassed the Zacks Consensus Estimate of 97 cents by 10.3%. Operating earnings also grew 9.2% from the year-ago figure of 98 cents.

NextEra Energy, Inc. NEE reported second-quarter 2017 adjusted earnings of $1.86 per share, beating the Zacks Consensus Estimate of $1.76 by 5.7%. Reported earnings were also up by 11.4% year over year.

WEC Energy Group WEC reported second-quarter 2017 adjusted earnings of 63 cents per share, surpassing the Zacks Consensus Estimate of 59 cents by 6.8% and the year-ago figure of 57 cents by 10.5%.

Zacks Rank

Public Service Enterprise Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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