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Wisconsin Energy Corporation (WEC) posted first-quarter 2013 net operating earnings of 76 cents per share, beating the Zacks Consensus Estimate by 5 cents.  The 2 cent year-over-year rise in earnings was primarily driven by higher earnings at the company’s We Power operations, positive impacts from the share repurchase program, and increase in electricity consumption by the residential, small commercial as well as industrial customers.

Total Revenue

Wisconsin Energy reported total revenue of $1,275.2 million, beating the Zacks Consensus Estimate by $25.2 million. On a year-over-year basis, revenues increased 7.1% on higher demand for natural gas in winter.

First-Quarter Operational Update

Total operating expenses increased 6.6% year over year to $954.2 million due to a rise in cost of goods sold, and higher fuel and purchased power costs, other operation and maintenance costs and depreciation and amortization expenses.

However, this increase in operating expenses was more than offset by higher revenues. Operating margin was 25.2% compared with 24.8% a year-ago.

Financials

Cash and cash equivalents as of Mar 31, 2013 were $24.7 million versus $35.6 million as of Dec 31, 2012.

Long-term debt decreased to $4.4 billion as of Mar 31, 2013 from $4.5 billion as of Dec 31, 2012.

Cash from operating activities during the first three months of 2013 was $330.3 million versus $340.5 million in the year-ago comparable period.

Capital expenditures were $133.6 million, down from $142.3 million incurred in the prior-year quarter.

Guidance

Wisconsin Energy reaffirmed its earnings guidance for 2013 at $2.38 to $2.48 per share.

Other Company Releases

Brookfield Infrastructure Partners L.P. (BIP) is slated to release its first quarter earnings on May 2. The Zacks Consensus Estimate is 84 cents per share.

Calpine Corp. (CPN) is slated to release its first quarter earnings on May 2. The Zacks Consensus Estimate is a loss of 6 cents per share.

ALLETE Inc. (ALE) is slated to release its first quarter earnings on May 8. The Zacks Consensus Estimate is 75 cents per share.

Our Take

Not only did Wisconsin Energy outperform earnings and revenues, it also enjoyed a rise in consumption of electricity by residential, and small commercial and industrial customers in the first quarter. In addition, it served 3,000 electricity and 6,000 natural gas additional customers at the end of the quarter against the year-ago quarter.

Moreover, we expect Wisconsin Energy’s ‘Power the Future’ plan, and its internal growth projects including a biomass plant in Rothschild to act as catalysts for its future performance.

Wisconsin Energy Corporation currently has a Zacks Rank #3 (Hold).

Milwaukee, Wis.-based Wisconsin Energy Corporation generates and distributes electricity in Southeastern, East Central, and Northern Wisconsin, as well as in the Upper Peninsula of Michigan. The company also distributes natural gas.

 
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