CPK Misses Q2 Earnings; Beats Sales

Zacks

Chesapeake Utilities Corp. (CPK) reported second-quarter 2013 operating earnings of 53 cents per share, down 7.2% from the Zacks Consensus Estimate of 57 cents. Earnings were a penny higher than the year-ago figure.

The slight year-over-year rise was the effect of continued investments in its businesses.

Total Revenue

Total revenue at the end of the second quarter was $94.1 million, up 12.2% from $83.9 million in the year-ago period. The year-over-year beat was primarily due to better performance at its Unregulated Energy segment, which offset the 0.6% decline in Regulated Energy revenues.

Revenues were also 8.2% higher than the Zacks Consensus Estimate of $87 million.

Highlights of the Release

Total operating expenses were $84.9 million, up 15.7% from $73.4 million incurred in the year-ago period.

Operating income was $9.1 million, down 12.5% from $10.5 million in the year-ago quarter.

Interest expenses decreased to $2.01 million from $2.24 million in the year-ago quarter.

Financial Highlights

Cash and cash equivalents as of Jun 30, 2013, were $2.2 million versus $3.4 million as of Dec 31, 2012.

Long-term debt was $107.7 million as of Jun 30, 2013, compared with $101.9 million as of Dec 31, 2012.

Cash flow from operating activities in the first half of 2013 was $54.1 million versus $60.8 million in the comparable period of 2012.

Other Company Releases

Atmos Energy Corp.’s (ATO) third quarter fiscal 2013 earnings of 42 cents surpassed the Zacks Consensus Estimate of 37 cents by 13.51%.

Questar Corp.’s (STR) second quarter earnings of 22 cents were in line with the Zacks Consensus Estimate.

Southwest Gas Corp.’s (SWX) second quarter earnings of 13 cents were 85.7% higher than the Zacks Consensus Estimate of 7 cents.

Our View

Chesapeake Utilities continues to make investments to upgrade and maintain its natural gas distribution and transmission systems. Besides organic investments, this energy company is also making strategic acquisitions. In May, the company purchased the operating assets of Eastern Shore Gas Company and its affiliates for $16.5 million and, in Jun 2013, it acquired the operating assets of Austin Cox Home Services, Inc. for $0.6 million.

These strategic initiatives in a way will help to maintain the momentum and expand its footprint and serve a larger customer base. Chesapeake Utilities Corp. presently carries a Zacks Rank #2 (Buy).

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