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OGE Energy (OGE) Q4 Earnings Beat Estimates, Revenues Up Y/Y

Zacks Equity Research

OGE Energy Corp.’s OGE fourth-quarter 2018 earnings of 27 cents per share surpassed the Zacks Consensus Estimate of 24 cents by 12.5%. However, the reported figure plunged 81.8% from $1.48 registered in the year-ago quarter. The downturn can be attributed to lower earnings from the utility business.

For 2018, the company reported earnings of $2.12 per share, which outpaced the Zacks Consensus Estimate of $2.08 by 1.9%. However, the bottom line declined 31.6% from $3.10 registered in the prior year.

Revenues

OGE Energy’s operating revenues of $511.8 million rose 2% from the prior-year quarter’s $501.9 million. The upside was primarily driven by year-over-year higher residential, industrial, oilfield and integrated market revenues.

For 2018, the company generated operating revenues of $2.27 billion, which inched up 0.4% from the prior-year figure of $2.26 billion.

OGE Energy Corporation Price, Consensus and EPS Surprise

OGE Energy Corporation Price, Consensus and EPS Surprise | OGE Energy Corporation Quote

Operational Highlights

Total sales in the reported quarter amounted to 6.8 million megawatt-hours (MWh), almost in line with 6.7 million MWh in the prior-year quarter. Higher system sales were offset by lower integrated market sales. Meanwhile, the company’s customer count inched up 0.9% to 849,372.

Cost of sales summed $228.9 million compared with $201.1 million in the prior-year quarter.

Total operating expenses rose 4.6% year over year to $224.9 million on account of higher operation and maintenance expenses, depreciation and amortization expenses as well as higher taxes (other than income).

Consequently, operating income decreased 32.3% to $58 million from the year-ago quarter’s $85.7 million.

Interest expenses totaled $37.8 million in the fourth quarter, up from $35.8 million a year ago.

Other Highlights of the Release

OGE Energy reported net income of $425.5 million in 2018, down from the prior-year figure of $619 million.

OG&E: The segment’s net income rose 7.2% to $328 million in 2018, from $306 million in 2017.

Natural Gas Midstream Operations: The segment posted net income of $109 million compared with $324 million in the prior year.

2019 Guidance

OGE Energy expects its earnings for 2019 to lie in the range of $2.05-$2.20 per share. The Zacks Consensus Estimate for 2019 earnings is pegged at $2.19, near the high end of the company’s guided range.

Zacks Rank

OGE Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

Entergy Corporation ETR reported fourth-quarter 2018 adjusted earnings of 60 cents per share, which surpassed the Zacks Consensus Estimate of 48 cents by 25%.

Ameren Corporation’s AEE fourth-quarter 2018 earnings of 28 cents per share from continuing operations missed the Zacks Consensus Estimate of 32 cents by 12.5%.

American Electric Power Co. AEP reported fourth-quarter 2018 operating earnings of 72 cents per share, in line with the Zacks Consensus Estimate.

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