CenterPoint Lags Earnings, Beats Rev - Analyst Blog
May 02 2013 - 12:40PM
Zacks
CenterPoint Energy Inc. (CNP), a domestic
energy delivery company, reported first quarter 2013 results with
adjusted earnings of 34 cents per share missing the Zacks Consensus
Estimate of 37 cents. However, earnings were flat year over
year.
The company’s regulated gas distribution unit and competitive
natural gas sales and services unit performed well. Also, the field
services unit at the midstream business continued to benefit from
its contracting strategy.
Operational Results
CenterPoint Energy’s total revenue for the reported quarter
increased 14.6% year over year to $2,388 million. The figure also
easily surpassed the Zacks Consensus Estimate of $2,150
million.
Natural gas expenses were up 26.3% year over year to $1,224
million. Operation and maintenance expense were up 6.4% year over
year to $484 million. Overall, operating income declined 1.8% year
over year to $332 million.
Segment Results
Electric Transmission & Distribution
During the quarter, the segment generated operating income of $84
million, down 21.5% year over year. Operating income included $49
million from the regulated electric transmission & distribution
utility operations (“TDU”) and $35 million from Transition and
System Restoration Bonds.
Operating income at TDU was down 30% year over year due to lower
revenues, higher expenses, and increased depreciation and other
taxes.
Natural Gas Distribution
Segment operating income was $139 million, up from $121 million in
the year-ago quarter. The upside reflects return to normal winter
weather, rate changes and customer growth. However, these positives
were partially offset by an increase in depreciation.
Competitive Natural Gas Sales and Services
Segment operating income was $7 million versus an operating income
of $1 million in the year-ago quarter.
Interstate Pipelines
The segment generated operating income of $52 million during the
quarter, down 13.3% from the prior-year quarter. The decline
reflects decline in off system transportation revenue, reduction in
pricing and volumes on some contract renewals and declines in
ancillary services.
Field Services
The Field Services segment reported an operating income of $53
million in the quarter, up 12.7% year over year. The results were
driven by acquisitions completed in 2012, the timing of revenue
from contracts with throughput commitments and higher natural gas
prices on the sale of retained gas. However, these positives
were partially offset by reduced gathering volumes and lower
liquids pricing.
Other Operations
Operating loss at the segment amounted to $3 million versus a
profit of $2 million in the year-ago quarter.
Financial Condition
As of Mar 31, 2013, CenterPoint Energy reported cash and cash
equivalents of $245 million, down from $646 million at the end of
Dec 31, 2012. Total long-term debt was $8,130 million, down from
$8,357 million at the end of Dec 31, 2012.
Capital expenditure during the quarter was $250 million, up from
$242 million in first quarter of 2012.
Guidance
The company expects earnings in the range of $1.17 to $1.25 for
full-year 2013. This guidance reflects the company’s performance
and the closing of midstream partnership on May 1, 2013.
Yesterday, CenterPoint Energy, OGE Energy Corp.
(OGE) and ArcLight Capital Partners, LLC declared the closing of a
previously announced partnership that includes CenterPoint Energy's
interstate pipelines and field services businesses and the
midstream business of Enogex LLC. The partnership will be managed
by a general partner whose governance will be shared by CenterPoint
Energy and OGE on an equal basis.
At the Peer
Last month, CMS Energy Corporation (CMS) announced
first-quarter 2013 earnings per share of 53 cents on both adjusted
and GAAP basis, beating the Zacks Consensus Estimate of 46 cents.
Earnings were 43.2% higher than 37 cents earned in the year-ago
quarter.
Zacks Rank
CNP Energy presently retains a short-term Zacks #3 Rank (Hold). In
the near term, we would advise investors to accumulate its
short-term Zacks Rank #2 (Buy) peer ALLETE, Inc.
(ALE).
ALLETE INC (ALE): Free Stock Analysis Report
CMS ENERGY (CMS): Free Stock Analysis Report
CENTERPOINT EGY (CNP): Free Stock Analysis Report
OGE ENERGY CORP (OGE): Free Stock Analysis Report
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