Dominion Resources Inc.
) reported third quarter 2013 operating earnings of $1.00 per
share, 9.9% higher than the Zacks Consensus Estimate of 91 cents.
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Earnings also surpassed the year-ago figure of 92 cents by 8.7%.
In fact, the company also sailed past the expected guidance range
of 85 to 95 cents for the quarter. The strong performance came on
the back of lower operating and maintenance expenses.
GAAP earnings were 98 cents versus 36 cents in the year-ago
quarter. The difference between GAAP and operating earnings in
the reported quarter was due to a one-time impact of 2 cents from
discontinued operations, impairment of certain natural gas
infrastructure assets and other small one-time charges.
Dominion's operating revenue of $3.43 billion in the third
quarter increased 3% year over year. The improvement in the top
line was primarily due to higher contribution from Dominion
Energy and Dominion Generation, marginally offset by lower
contribution from Dominion Virginia Power.
Total revenue also came ahead of the Zacks Consensus Estimate of
$3.17 billion by 7.9%.
Dominion Virginia Power recorded revenue of $837 million in the
third quarter of 2013, down 0.6% year over year.
Dominion Energy reported revenue of $642 million, up 12.3% year
Dominion Generation's revenue increased 3.1% year over year to
Total operating expenses in the third quarter increased 2.9% year
over year to $2.36 billion. The increase was due to higher
electric fuel and other energy related purchases, purchased
electric capacity and purchased gas. This was marginally offset
by an 18.3% decline in operations and maintenance expenses.
However, total operating expenses in the reported quarter
contracted 200 basis points as a percentage of total revenue.
This boosted the operating income of the company, which increased
8.9% year over year to $1.07 billion.
Interest and related charges in the reported quarter were $0.21
billion versus $0.19 billion in the year-ago quarter.
Dominion exited the quarter with cash and cash equivalents of
$287 million, up from $248 million as of Dec 31 2012.
Long-term debt at quarter end increased to $18.54 billion from
$16.85 billion at prior-year end.
Cash from operating activities in the first nine months of 2013
decreased to $2.95 billion from $3.46 billion in the year-ago
Dominion expects to deliver fourth quarter operating earnings in
a range of 85 cents to 95 cents per share. The fourth quarter
results are likely to benefit from lower operations and
maintenance expenses, higher rate adjustment clause revenues and
anticipated growth in its electric service territory.
Dominion affirmed full year 2013 operating earnings in a band of
$3.20-$3.50 per share.
Other Company Releases
American Electric Power Co., Inc.
) earnings per share of $1.10 in the third quarter 2013 surpassed
the Zacks Consensus Estimate of $1.08 by 1.85%.
) earnings per share of 18 cents in the third quarter were in
line with the Zacks Consensus Estimate.
) reported third-quarter 2013 operating earnings of $1.46 per
share, up 20.7% from the Zacks Consensus Estimate of $1.21.
The approval from the U.S. Department of Energy for natural gas
exports to non-Free Trade Agreement countries was an important
development in the reported quarter. Dominion expects to export
gas from its Cove Point LNG facility from 2017 onwards. We
believe this will definitely benefit the company over the long
run, given the increasing emphasis on the usage of natural gas on
a global scale.
Despite the better-than-expected third quarter results, Dominion
has missed earnings estimates in the first half of the year. The
company holds a Zacks Rank #4 Rank (Sell). With a market
cap of $37.05 billion, the company employs 15,500