After market close, Michigan-based
CMS Energy Corp.
) announced third-quarter 2013 earnings per share of 46 cents on
both adjusted and GAAP basis, missing the Zacks Consensus
Estimate by a penny. Earnings declined 14.8% year over year.
AMER ELEC PWR (AEP): Free Stock Analysis
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UNS ENERGY CORP (UNS): Free Stock Analysis
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Operating revenues of CMS Energy in the quarter under review
grossed $1,445 million, down 4.1% year over year. The top line
missed the Zacks Consensus Estimate by $150 million.
Purchased and interchange power expenses were $383 million, down
0.8% year over year. Total operating expenses were down 3.1% year
over year to $1,128 million. Lower operating expenses failed to
offset the decline in operating revenue, thereby resulting in a
7.6% drop in operating income to $317 million.
CMS Energy ended the third quarter with cash and cash equivalents
of $260 million, surging from $93 million as of Dec 31, 2012.
Total debt, capital and finance leases rose to $7,658 million
from $7,381 million as of Dec 31, 2012.
The company is working to lower its costs as a part of its
Promise to Michigan program that aims at providing affordable and
reliable services to its customers. It intends to avoid electric
and gas base rate increases through 2014, reduce costs and
provide full support to its customers with its expansion efforts.
During the quarter, the company completed an investment upgrade
worth $175 million at its Ray Compressor Station. The project's
main focus was to install five new engines that can produce
23,675 horsepower to drive their respective two-stage
The company further aims at saving electricity bills for
customers by making their homes more energy efficient. In Oct
2013, the company lowered its fuel costs by 44%, thereby saving
$260 million for customers this winter compared to five years
ago. An average residential customer is expected to save $50 due
to lower heating costs this winter. On the whole, the bill of an
average residential customer is down $200 this heating season
compared to five years ago as a result of this initiative.
The company will conduct its investor day today.
At the Peer
American Electric Power Company Inc.
) reported third quarter 2013 operating earnings of $1.10 per
share, beating the Zacks Consensus Estimate of $1.08 by 1.9%. The
quarterly figure also improved 7.8% from the year-ago profit
level of $1.02.
CMS Energy's top and bottom line failed to meet the Zacks
Consensus Estimate. Lackluster electricity sales growth is
hampering the earnings prospects of the company. Lower demand due
to a tepid economy has significantly affected retail sales, as
well as industrial sales volume. Also, pending regulatory cases
remain a matter of concern.
However, the company's focus on reducing costs, enhancing
reliability, and investments in Michigan would help in improving
the top and bottom line. CMS Energy carries a Zacks Rank #3
However, stocks to look out for in the space are
UNS Energy Corp.
Alliant Energy Corp.
). While UNS Energy carries a Zacks Rank #1 (Strong Buy), Alliant
Energy holds a Zacks Rank #2 (Buy).