Northeast Utilities Misses on Q2 Earnings, Lowers Guidance

Zacks

Northeast Utilities’ (NU) second-quarter 2014 earnings of 42 cents per share lagged the Zacks Consensus Estimate of 51 cents by 17.6%. Reported earnings also missed the year-ago number by 23.6%. The year-over-year decline was due to lower contribution from its Electric Distribution and Generation and Electric Transmission segments.
 

On a GAAP basis, the company posted earnings of 40 cents per share compared with 54 cents per share a year ago. The difference between GAAP and adjusted earnings was due to an integration charge of 2 cents.

Revenues

In second-quarter 2014, Northeast Utilities' operating revenues of $1,667.6 million beat the Zacks Consensus Estimate of $1,472 million by 13.3%. Quarterly revenues increased nearly 2% from $1,635.9 million in the year-ago quarter.

Operational Highlights

In the quarter under review, Northeast Utilities’ total operating expenses increased 7.6% year over year to $1,383.6 million, mainly due to a rise in purchased power, fuel and transmission costs (up 27.8%), and higher operations and maintenance expenses (up 4.5%).

The company’s operating income was $293.9 million, down 16.1% from $350.6 million a year ago.

In the first half of 2014, Northeast Utilities' overall retail electricity distribution volume moved up 0.7% year over year to 26,884 Gigawatt hours. Over the same period, the company’s natural gas distribution volume was 61,445 million cubic feet, up 12.4% year over year.

Financial Position

As of Jun 30, 2014, Northeast Utilities had cash and cash equivalents of $34.1 million, down from $43.4 million as of Dec 31, 2013.

Long-term debt as of Jun 30, 2014 was $8,147.1 million versus $7,776.8 million as of Dec 31, 2013.

In the first half of 2014, net cash flows from operating activities were $896.7 million versus $769 million in the year-ago comparable period.

Guidance

Northeast Utilities lowered its 2014 earnings guidance to the range of $2.60–$2.70 per share from its earlier expectation of $2.60–$2.75 per share.

Other Company Releases

CMS Energy Corporation (CMS) reported second-quarter 2014 operating net earnings of 30 cents per share, surpassing the Zacks Consensus Estimate by 15.4%.

Pinnacle West Capital Corp. (PNW) reported second quarter earnings per share of $1.19, outpacing the Zacks Consensus Estimate by 4.4%

Public Service Enterprise Group Inc. (PEG) reported second-quarter 2014 earnings of 49 cents per share, lagging the Zacks Consensus Estimate of 53 cents by 7.5%.

Zacks Rank

Northeast Utilities currently has a Zacks Rank #4 (Sell).

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