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OGE Energy (OGE) Tops Q4 Earnings Estimate, Sales Down Y/Y

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OGE Energy Corp. OGE reported fourth-quarter 2017 adjusted earnings of 30 cents per share, beating the Zacks Consensus Estimate of 28 cents by 7.1%. Adjustments include a one-time tax impact of $1.18 per share in relation to the recent U.S. Tax reform.

The company reported GAAP earnings of $1.48, which surpassed the year-ago quarter’s figure of 29 cents by a whopping 410%.

In 2017, the company reported adjusted earnings of $1.92 per share, which surpassed the Zacks Consensus Estimate by 1.1%.

Revenues

OGE Energy’s operating revenues of $501.9 million fell 5% from the prior-year quarter’s figure of $530.8 million.

In 2017, the company’s operating revenues of $2,261 slipped 0.1% from the prior-year’s figure of $2,259 million.

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

Operational Highlights

Total sales in the reported quarter amounted to 6 million megawatt-hours (MWh), down from 7.8 million MWh in the prior-year quarter. The decline can be attributed to lower system as well as integrated market sales. Meanwhile, the company’s customer count increased by 8,248 or 1%.

Cost of sales in the quarter under review was $201.1 million, down 14.3%.

Total operating expenses increased 3.4% year over year to $221.1 million on account of higher other operation and maintenance expenses. Consequently, operating income declined 3% to $79.7 million from the year-ago figure of $82.2 million.

Interest expenses totaled $35.8 million in the quarter, up from $34.4 million of the same quarter last year.

Other Highlights of the Release

OGE Energy reported net income of $619 million in 2017, up from the prior-year figure of $338.2 million

OG&E: The segment’s net income increased by 7.7% year over year to $306 million in 2017. The upside was driven by lower depreciation and amortization expense and an increase in other income primarily from higher allowance for funds used during construction associated with the Mustang Energy Center and environmental compliance projects.

Natural Gas Midstream Operations: The segment posted net income of $324 million in 2017 compared with $54 million in the year-ago period. The upside was mainly owing to increased margins, volumes and pricing primarily in the gathering and processing segment.

Guidance

OGE Energy issused guidance for 2018. The company currently expects to generate consolidated earnings in the range of $1.90-$2.05 per share.

Moreover, OG&E, the regulated utility, expects earnings to be in the range of $1.43-$1.53 per share, while the same for Enable Midstream is projected to be in the band of 48 cents to 52 cents per share.

Peer Releases

CenterPoint Energy CNP reported fourth-quarter 2017 adjusted earnings of 33 cents per share, which beat the Zacks Consensus Estimate of 30 cents by 10%. Earnings improved 26.9% from the year-ago quarter’s figure of 26 cents.

American Electric Power AEP reported fourth-quarter 2017 operating earnings per share of 85 cents, exceeding the Zacks Consensus Estimate of 81 cents by 4.9%.

NiSource NI reported fourth-quarter 2017 operating earnings of 33 cents per share, surpassing the Zacks Consensus Estimate by a penny. However, earnings were on par with the year-ago quarter.

Zacks Rank

OGE Energy 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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