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ALLETE (ALE) Beats on Q2 Earnings and Revenue Estimates

ALLETE, Inc. ALE reported second-quarter 2017 adjusted earnings of 72 cents per share, surpassing the Zacks Consensus Estimate of 57 cents by 26.3%. On a year-over-year basis earnings increased 44%.

Increased earnings in the second quarter can be attributed to higher net income at Minnesota Power resulting from the implementation of interim retail rates at the beginning of the year and higher kilowatt-hour sales due to increased sales to Minnesota Power's industrial customers.  Further, the timing of the recognition of a conservation improvement program financial incentive following the approval Minnesota Public Utilities Commission provided more impetus.

Total Revenue

In second-quarter 2017, ALLETE’s total revenues of $353.3 million beat the Zacks Consensus Estimate of $318 million by 11.1%. Further, revenues were up 12.2% from $314.8 million in the prior-year quarter.

Highlights of the Release

ALLETE’s total electricity sales volume increased 2.8% year over year to 3,558 million kilowatt-hours.

The company’s total operating expenses were $298.3 million, reflecting an increase of 9.4% year over year, primarily as a result of investments made in waste treatment and water safety applications.

Operating income in the reported quarter increased 30.3% year over year to $55 million.

Interest expenses decreased 4% year over year to $16.7 million.

Financial Update

ALLETE’s cash and cash equivalents, as of Jun 30, 2017 were $84.2 million, up from $27.5 million as of Dec 31, 2016.

Long-term debt as of Jun 30, 2017 was $ 1,401.4 million, higher than $1,370.4 million in the end of 2016.

Allete, Inc. Price, Consensus and EPS Surprise

 

Peer Releases

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

FirstEnergy Corporation FE reported second-quarter 2017 operating earnings of 61 cents per share, in line with the Zacks Consensus Estimate. Quarterly earnings were also up 8.9% year over year.

Xcel Energy Inc. XEL recorded second-quarter 2017 operating earnings of 45 cents per share, beating the Zacks Consensus Estimate of 43 cents by 4.6%. Earnings were 15.4% higher than the year-ago quarter.

Zacks Rank

ALLETE, Inc. 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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Allete, Inc. (ALE): Free Stock Analysis Report
 
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