Avista Beats on Earnings, Misses Rev - Analyst Blog

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Avista Corp. ( AVA ) announced third-quarter 2013 earnings of 19 cents per share, surpassing the Zacks Consensus Estimate of 15 cents by 26.7%. On a year-over-year basis, earnings jumped 90%, primarily on the heels of lower total operating expenses.

Operational Update

The company generated operating revenues of $335.9 million, missing the Zacks Consensus Estimate by 3.5%. Quarterly revenues edged down 1.4% from $340.6 million in the prior-year quarter.

In the quarter under review, total operating expenses were $300.6 million, down 4.3% year over year due to a decline in utility resource costs.

A decrease in revenues was more than offset by a decline in total operating expenses. Avista's operating margin jumped to 10.5% from the year-ago level of 7.8%.

Segmental Highlights

Avista Utilities: Segmental net income increased 23.3% year over year to $9.4 million, on the back of warmer-than-normal weather conditions, general electricity rate-hike approvals in Washington and general rate increase for natural gas in Washington and Idaho.

Ecova: The segment's net income spiked 375% year over year to $3 million, primarily due to higher revenues from the expense and data management services and addition of new services.

Other: The segment reported a loss of $1.1 million, narrower than the year-ago loss of $2.5 million primarily due to an earnings contribution from METALfx.

Financial Update

As of Sep 30, 2013, Avista's cash and cash equivalents were $92 million versus $75.5 million as of Dec 31, 2012.

Long-term debt, as of Sep 30, 2013, was $1,272.3 million compared with $1,178.4 million at the end of 2012.

During the first nine months of 2013, the company invested $220.7 million as utility capital expenditures.

Share Issue Update

As of Sep 30, 2013, Avista had 1.8 million shares of common stock to be issued under sales agency agreements. In the first nine months of 2013, the company issued $4 million (net of issuance costs) of common stock under the dividend reinvestment and direct stock purchase plan, and employee plans.

Guidance

Avista reiterated its full-year 2013 consolidated earnings guidance, which is in the range of $1.70 - $1.90 per share.

The company also provided full-year 2014 consolidated earnings guidance of $1.77 to $1.97 per share.

Avista intends to invest $280 million in 2013 under the capital spending program. The company increased its capital spending guidance for full-year 2014 and 2015 to $335 million and $360 million, respectively, from the earlier projection of $260 million. The company increased its investment level primarily to meet higher utility demand and upgrade existing generation, transmission and energy distribution systems.

Peer Comparison

American Electric Power Company Inc. ( AEP ) reported third-quarter operating earnings of $1.10 per share, beating the Zacks Consensus Estimate of $1.08 by 1.9%.

Zacks Rank

Avista currently has a Zacks Rank #3 (Hold). However, other stocks from the industry that are presently performing well include NRG Yield, Inc. ( NYLD ) with a Zacks Rank #1 (Strong Buy) and UNS Energy Corporation ( UNS ) with a Zacks Rank #2 (Buy).



AMER ELEC PWR (AEP): Free Stock Analysis Report

AVISTA CORP (AVA): Free Stock Analysis Report

NRG YIELD INC-A (NYLD): Free Stock Analysis Report

UNS ENERGY CORP (UNS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AEP , AVA , NYLD , UNS

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