Avista Corp. ( AVA ) announced
fourth-quarter 2012 earnings of 26 cents per share, missing the
Zacks Consensus Estimate of 45 cents and below the year-ago figure
of 42 cents per share.AES CORP (AES): Free Stock Analysis ReportAVISTA CORP (AVA): Free Stock Analysis ReportBROOKFIELD INFR (BIP): Free Stock Analysis
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The company's full year 2012 earnings were $1.32 per share,
missing the Zacks Consensus Estimate of $1.68 and short of the
year-ago figure of $1.72 per share.
The results reflect underperformance in all business segments due
to warmer weather in the first and fourth quarters of 2012,
expenses related to voluntary severance incentive program,
increases in costs at all segments and continued slow load
In the fourth quarter of 2012, Avista generated total revenue of
$410.5 million, lower than $438.9 million in the year-ago quarter
and the Zacks Consensus Estimate of $451 million. In full year
2012, the company generated total revenue of $1,547 million, down
4.5% year over year. The top-line results also failed to meet the
Zacks Consensus Estimate of $1,687 million.
In the reported quarter, total operating expenses were $369.5
million, down from $389.6 million in the fourth quarter of
Avista Utilities: In the fourth quarter of 2012,
segment income was $16.5 million, down from $22.2 million a year
ago. The results reflect warmer winter weather and increase in
other operating expenses including costs under the voluntary
severance incentive plan, depreciation and amortization, and
interest expense. These negatives were partially offset by general
rate increases and decrease in taxes other than income taxes. In
full year 2012, segment income was $81.7 million, down from $90.9
million in full year 2011.
Ecova: Segment income, during the quarter under
review, was $862 million, significantly down 67.5% year over year
due to higher operating costs, increased costs associated with
completing and integrating the acquisitions of Prenova and LPB
Energy Management ("LPB"), and an increase in depreciation and
amortization. Revenue growth for the data and energy management
services was not as high as expected and failed to offset the
negatives. In full year 2012, segment income was $1,825 million,
down from $9,671 million in full year 2011.
Other: Segment losses were $1,551.0 million
versus a loss of only $222 million in the fourth quarter of 2011.
The significant loss reflects losses on and impairments of
investments, strategic consulting and other corporate costs and
Avista Energy litigation costs. However, these were partially
offset by an earnings contribution from METALfx.
At the end of Dec 31, 2012, the company held cash & cash
equivalents worth $75.5 million versus $74.7 million at the end of
full year 2011. Long-term debt increased significantly to $1,178.4
million from $1,169.8 million at the end of 2011.
As of Dec 31, 2012, the company had 1.8 million shares of common
stock to be issued under sales agency agreements. In full-year
2012, the company sold 0.9 million shares of common stock for a
total of $29.1 million which includes $23.4 million under sales
In order to maintain a capital structure at an appropriate level
for the business, the company expects to issue up to $50 million of
common stock in 2013 with the majority of the issuance to be made
in the second half of 2013.
For 2013, Avista expects earnings at Avista Utilities in the range
of $1.64 to $1.78 per share, up from its previous expectation of
$1.62 to $1.76 per share. The company expects earnings at Ecova in
the range of 10 cents to 14 cents per share. For the Other
category, the company forecasts loss in the range of 2 cents to 4
cents per share.
Avista expects total earnings in 2013 in the range of $1.70 to
$1.90 per share. It expects utility capital expenditures to be
approximately $260 million in both 2013 and 2014.
Avista failed to meet the Zacks Consensus Estimate on both the top
and the bottom line. The company was hard hit by increased costs
across all segments. Also, price fluctuations in the wholesale
power and natural gas markets, lower demand for electricity and a
tepid economy remained as headwinds.
However, going forward, the company's significant capital
investments in generation, transmission and distribution systems
would lift the performance. Also, the company is expected to
benefit from general rate increases. The company presently retains
a short-term Zacks Rank #3 (Hold).
Recently, another utility company Brookfield
Infrastructure Partners L.P. ( BIP ) announced
fourth-quarter 2012 operating earnings of 25 cents per unit, 56.9%
lower than the Zacks Consensus Estimate of 58 cents. The results of
the partnership were a nickel lower than the year-ago earnings.
Also, DTE Energy Company ( DTE ) reported fourth
quarter and full-year 2012 earnings. In the fourth quarter, the
company posted operating earnings of 85 cents per share, in line
with the Zacks Consensus Estimate. However, earnings were below the
year-ago figure of 89 cents per share.
Avista Corporation engages in the generation, transmission, and
distribution of energy and other energy-related businesses
primarily in the United States and Canada. It operates in two
segments, Avista Utilities and Ecova. In the near term, we would
advise investors to accumulate its short-term Zacks #2 Rank (Buy
rating) peer The AES Corporation ( AES ).