Pepco Holdings Inc.
) is slated to release its third-quarter 2012 earnings results
before the earnings bell on November 6, 2012.
DTE ENERGY CO (DTE): Free Stock Analysis
PEPCO HLDGS (POM): Free Stock Analysis Report
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Second Quarter Recap
The company reported second quarter 2012 earnings from continuing
operations of 25 cents per share, much lower than the year-ago
figure of 43 cents. Earnings were also lower than the Zacks
Consensus Estimate of 32 cents.
The year-over-year decline in earnings was due to higher
operating and maintenance expenses at Power Delivery Services and
lower earnings at Pepco Energy Services.
Total revenue of the company at the end of the second quarter was
$1.18 billion, down 16.5% from $1.41 billion in the year-ago
period. The year-over-year decline was primarily due to lower
contribution from Pepco Energy Services and Power Delivery
Services. Revenues also failed to match the Zacks Consensus
Estimate of $1.95 billion.
Total operating expenses were $1.03 billion versus $1.21 billion
in the year-ago period. The decline stemmed from a 31.6%
decrease in fuel and purchase energy costs.
Interest expenses at second quarter end were $65 million versus
$63 million at the end of the year-earlier period.
During the second quarter earnings release Pepco Holdings
reiterated its 2012 earnings per share outlook in the range of
$1.15 to $1.30. The guidance excludes the impact of discontinued
operations and assumes normal weather during the year.
The Zacks Consensus Estimate for the third quarter 2012 is 41
cents per share, up an estimated 17.6% from 35 cents reported in
the year-ago quarter. The current Zacks Consensus Estimate ranges
between 37 cents per share and 46 cents per share.
The full year 2012 Zacks Consensus Estimate is $1.20, down 3.8%
from $1.25 reported in the previous year. The current Zacks
Consensus Estimate ranges between $1.15 per share and $1.25 per
Estimate Revisions Trend
The estimates remained static for the third quarter in the past 7
and 30 days.
For full year 2012, none of the 10 estimates changed in the past
7 days. One of the 10 estimates however moved down in the last 30
days, while none moved north.
Given that estimate revision trends have hit a plateau, the Zacks
Consensus Estimates for the third quarter and for the full year
remained unchanged in the last 7 days. Consensus estimate for the
third quarter remained unchanged in the last 30 days, while for
the full year it went down by a penny in the said period.
With respect to earnings surprise, the company's performance
failed to measure up to expectations in three out of the trailing
four quarters. The results of the company surpassed our
expectation in one of the last four quarters.
The earnings surprise in the last four quarters ranged from
(21.87%) to 20.00%. The average surprise over the last four
quarters remained a negative 8.29%.
The company reported lackluster numbers in the second quarter in
the wake of poor performance from both its reporting segments.
Meanwhile Pepco has decided to implement a few changes in the
management. We believe these changes are directed towards turning
the tide in favor of the company.
Pepco Holdings like other utility companies have been affected by
Hurricane Sandy and we believe the full impact of the storm on
its financial results could be gauged when it reports its fourth
Pepco Holdings presently retains a short-term Zacks #3 Rank (Hold
rating). The company's primary competitors include
DTE Energy Co.
). DTE Energy reported third quarter 2012 earnings per share of
$1.31, easily beating the Zacks Consensus Estimate by 19 cents.
Results improved 22.4% year over year.
Based in Washington, District of Columbia, Pepco Holdings,
through its two operating divisions, Power Delivery and
Competitive Energy, involves in transmission and distribution of
electricity, as well as delivery and supply of natural gas.
With a market capitalization of $4.50 billion, the company has
5,104 full time employees.