Diversified energy company
) announced first-quarter 2013 operating earnings of 76 cents per
share, beating the Zacks Consensus Estimate by 7 cents. However,
the results lagged the year-ago earnings of 82 cents by 7.3%.
Earnings in the reported quarter benefited from lower operating
costs, higher distribution deliveries and lower general taxes.
However, these benefits were offset by lower commodity margin,
higher depreciation expense and reduced revenues from the
regulated transmission business.
GAAP loss during the quarter was 47 cents per share versus
earnings of 73 cents in the first quarter of 2012.
The difference between basic GAAP and operating earnings during
the quarter was due to the impact of a few one-time items such as
18 cents for debt redemption, 4 cents for regulatory charges, 1
cent for trust securities impairment, 1 cent for mark to market
adjustment, 1 cent for non-core asset sale impairments, 1 cent
for plant closing costs and 3 cents for merger accounting.
FirstEnergy generated total revenue of $3.73 billion in the first
quarter versus $3.99 billion in the year-ago quarter. The 6.5%
decline in revenue was primarily due to lower Electric sales in
the reported quarter, which fell by 6.4%.
The top line of the company was 8.6% lower than the Zacks
Consensus Estimate of $4.08 billion.
Highlights of the Release
Total electric distribution deliveries in the reported quarter
increased 2.6% from the prior-year level. The colder winter
benefited the results as heating-degree-days were 30% higher than
the same period last year. Residential deliveries increased 6%,
usage in the commercial sector increased 0.6%, while industrial
usage increased 0.4%.
Total expenses in the reported quarter were $3.1 billion, down
5.21% from $3.24 billion in the prior-year quarter. The
decline in expenses was primarily due to a 12.6% reduction in
fuel and purchased power expenses.
Interest expenses in the reported quarter increased by $10
million to $256 million, mainly due to higher debts compared to
the prior year.
AMER ELEC PWR (AEP): Free Stock Analysis
CMS ENERGY (CMS): Free Stock Analysis Report
DTE ENERGY CO (DTE): Free Stock Analysis
FIRSTENERGY CP (FE): Free Stock Analysis
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Cash in hand as of Mar 31, 2012, was $67 million versus $172
million as of Dec 31, 2012.
Cash from (used in) operating activities in the first quarter of
2013 was $50 million versus ($413 million) in the prior-year
Long-term debt and other long-term obligations as of Mar 31,
2013, were $15.8 billion versus $15.2 billion as of Dec 31, 2012.
During the quarter under review the company issued new debts
worth $1.8 billion and redeemed old debts of nearly $1 billion.
FirstEnergy utilized a portion of the fresh issue to redeem old
debts and other development purposes.
FirstEnergy reiterated its operating earnings per share
expectation for 2013 in the range of $2.85 to $3.15. GAAP
earnings for 2013 are expected in the range of $2.37 to $2.67 per
Other Company Releases
American Electric Power Company Inc.
) posted adjusted first quarter 2013 operating earnings of 80
cents per share, in line with the Zacks Consensus Estimate.
CMS Energy Corp
) reported first-quarter 2013 operating earnings of 53 cents per
share, 15.2% higher than the Zacks Consensus Estimate of 46
DTE Energy Company
) reported first quarter 2013 earnings per share of $1.34, easily
beating the Zacks Consensus Estimate of $1.03.
FirstEnergy reported positive earnings surprises in the last
three quarters. In the current quarter, a cold winter resulted in
higher demand for electricity.
The company continues to upgrade and improve its infrastructure.
We believe these investments will allow the company to increase
the reliability of its services and cater to an expanding
customer base. The total retail customer base at the end of the
first quarter was 2.7 million, increasing 42% year over year.
Based in Akron, Ohio, FirstEnergy is engaged in the generation,
transmission, and distribution of electricity, as well as energy
management and other energy-related services. FirstEnergy
currently has a Zacks Rank #3 (Hold).