CMS Energy Corporation
) announced adjusted earnings of 54 cents per share for the third
quarter of 2012, missing the Zacks Consensus Estimate by a penny.
However, it was above the year-ago figure of 53 cents. The
results were driven by the company's cost control initiatives and
continuous execution of its plan to invest in its utility
Including a one-time gain of 1 cent, the company recorded
earnings of 55 cents per share versus 53 cents in the year-ago
Operating revenue of CMS Energy in the quarter under review was
$1.51 billion, up 2.9% year over year. However, results
were lower than the Zacks Consensus Estimate by $145 million.
Operating expenses in the quarter increased to $1.16 billion from
$1.15 billion in the year-ago period. CMS Energy reported
operating income of $343 million, up from $316 million in the
year-ago quarter. Overall, the company reported adjusted net
income of $145 million, up 4.3% year over year.
CMS Energy ended the quarter with cash and cash equivalents of
$128 million compared with $623 million at the end of September
30, 2011. Total debt, capital and finance leases increased $7.23
billion from $7.17 billion as of September 30, 2011.
CMS Energy reaffirmed its guidance for fiscal 2012 adjusted
earnings in the range of $1.52-$1.55 per share. This is
consistent with the company's long-term plan of 5%-7% annual
Jackson, Michigan-based CMS Energy is the holding company of
Consumers Energy Company (Consumers) and CMS Enterprises Company
(Enterprises). Consumers is a electric and gas utility company
that provides electricity and natural gas to Michigan's
residents, and serves customers in all 68 counties of Michigan's
Lower Peninsula. CMS Enterprises Company, through its
subsidiaries and equity investments, is engaged primarily in
independent power production.
CMS Energy presents a strong growth story, given its stable
electric and gas utility operations, investment plans, favorable
regulatory policies in Michigan, higher rates, and a high
Additionally, the installation of "smart meters" at customer
homes and businesses, its five-year commitment to the Pure
Michigan Business Connect (an initiative to create jobs and boost
the state's economy by encouraging Michigan companies to do more
business with each other) and the company's target to hold its
average base rate increases equal to or below the rate of
inflation for the next five years, will add to the profits of CMS
However, we remain concerned about the unfavorable macro
backdrop, lower demand for electricity and regulatory cases. Like
), CMS Energy presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the
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