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PNM Resources Beats Q4 Earnings & Revs

Zacks Equity Research

PNM Resources, Inc. (PNM) posted fourth-quarter 2013 ongoing earnings of 21 cents per share, surpassing the Zacks Consensus Estimate of 18 cents by 16.7%. Reported earnings were also up 61.5% from 13 cents a year ago.

Quarterly GAAP earnings were 10 cents per share, down from the prior-year figure of 11 cents per share.

For 2013, PNM Resources’ ongoing earnings jumped 7.6% year over year to $1.41 per share.

On a GAAP basis, the company’s earnings were $1.25 per share compared with $1.31 per share a year ago. The variance between GAAP and ongoing earnings were primarily due to the combined impact of the New Mexico corporate income tax rate change, mark-to-market effect of economic hedges, loss on reacquired debt, state tax credit impairment and regulatory disallowance.

Operational Results

In fourth-quarter 2013, PNM Resources’ total operating revenues of $322.9 million beat the Zacks Consensus Estimate by 10.2%. Quarterly revenues were marginally higher than the year-ago figure of $322.7 million.

The company’s annual total operating revenues were $1,387.9 million, up 3.4% year over year. The improved performance was primarily due to a year over-year rise of 2.2% and 8.6% at the company’s Public Service Company of New Mexico and Subsidiaries (“PNM”) and Texas-New Mexico Power Company and Subsidiaries (“TNMP”) segments’ revenues, respectively.

In 2013, total operating expenses increased around 3% year over year to $1,101.1 million primarily due to increases in cost of energy, depreciation expenses, and taxes (other than income taxes).

The company’s annual operating income edged up 4.8% year over year to $286.8 million.

PNM Resources’ interest charges were $121.4 million in 2013 compared with $120.8 million a year ago.

Financial Condition

As of Dec 31, 2013, PNM Resources reported cash and cash equivalents of $2.5 million, down from $9.0 million as of Dec 31, 2012.

Long-term debt was $1,670.4 million as of Dec 31, 2013, up from $1,669.8 million at the end of Dec 31, 2012.

For 2013, the company’s net cash provided by operating activities was $260.5 million, lower than $268.4 million in the year-ago comparable period.


PNM Resources reiterated its 2014 ongoing earnings guidance in the range of $1.42 - $1.52 per share.

The company provided its total capital plan of $2.2 billion within a time span of 2014 - 2018.

Peer Comparison

American Electric Power Company Inc. (AEP) reported fourth quarter 2013 operating earnings of 60 cents per share, beating the Zacks Consensus Estimate of 56 cents by 7.1%.

Zacks Rank

PNM Resources currently has a Zacks Rank #2 (Buy). Some other stocks worth considering in the utilities industry include Public Service Enterprise Group Inc. (PEG) and Avista Corporation (AVA). While Public Service Enterprise holds a Zacks Rank #1 (Strong Buy), Avista Corporation carries a Zacks Rank #2 (Buy).

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