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Dominion Resources (D) Beats on Q1 Earnings and Revenues

Zacks Equity Research

Dominion Resources Inc. D reported first-quarter 2017 operating earnings of 97 cents per share, beating the Zacks Consensus Estimate of 96 cents by a penny. Earnings were within management’s guidance range of 90 cents to $1.10 per share.

Operating earnings also increased 1.04% from 96 cents earned a year ago. The year-over-year increase is primarily due to higher revenues from regulated growth projects, lower electric capacity expense and the addition of Dominion Questar.

 


GAAP earnings were $1.01 per share compared with 88 cents in the year-ago quarter. The difference between GAAP and operating earnings was due to investments in nuclear decommissioning trust funds.

Total Revenue

Dominion’s total revenue came in at $3,384 million, beating the Zacks Consensus Estimate of $3,336 million by 1.4%. Quarterly revenues were also up 15.8% year over year.

Highlights of the Release

Total operating expenses increased 10.8% year over year to $2,259 million primarily due to a 156.3% surge in purchased gas prices.

Interest and related charges in the reported quarter were $292 million, up 29.2% from the year-ago quarter.

In the reported quarter, Dominion Virginia Power’s electric customer base increased by 24,832 from the prior-year quarter.  Due to a mild weather condition, total electricity sales volumes dropped 3.1% to 20,527 Gigawatt per hour (Gwh).

Dominion Resources, Inc. Price, Consensus and EPS Surprise

 

Dominion Resources, Inc. Price, Consensus and EPS Surprise | Dominion Resources, Inc. Quote

Segment Update

Dominion Virginia Power recorded net income of $125 million or 20 cents per share in first-quarter 2017.

Dominion Energy recorded earnings of $263 million or 42 cents per share in the reported quarter.

Dominion Generation’s earnings were $261 million or 41 cents per share.

Corporate and Others incurred a loss of $38 million or 6 cents.

Financial Update

Dominion exited first-quarter 2017 with cash and cash equivalents of $486 million, up from $261 million as of Dec 31 2016.

Long-term debt as of Mar 31, 2017 was $31.1 billion compared with $30.2 billion at the end of 2016.

Cash from operating activities in first-quarter 2017 was $1.36 billion, up 14.3% from $1.19 billion in the year-ago period.

Looking Ahead

In second-quarter 2017, Dominion expects to generate operating earnings of 60–70 cents per share compared with 71 cents earned in second-quarter 2016.

For the full year, Dominion reiterated its earnings guidance in the range of $3.40–$3.90 per share.

Our View

Despite a negative impact due to mild weather, Dominion’s earnings and revenues were both higher than expected. The company is enjoying the benefit of revenues from its regulated growth projects.

Dominion’s Greensville County Power Station and Cove Point Liquefaction project are proceeding on time and budget. In addition, the company is also developing over 3 billion cubic feet per day of gas infrastructure projects. All these projects are likely to boost the performance of the company over the long term.

Dominion Resources has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

American Electric Power Co., Inc. AEP reported first-quarter 2017 operating earnings of 96 cents per share, lagging the Zacks Consensus Estimate of 97 cents by 1.03%.

NextEra Energy, Inc. NEE reported first-quarter 2017 adjusted earnings of $1.75 per share, beating the Zacks Consensus Estimate of $1.56 by 12.2%.

WEC Energy Group WEC reported first-quarter 2017 adjusted earnings of $1.12 per share, beating the Zacks Consensus Estimate by 5.66%.

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