Diversified energy company
) announced second-quarter 2013 operating earnings of 59 cents
per share, beating the Zacks Consensus Estimate by 7 cents.
However, the results lagged the year-ago earnings by a penny.
Earnings in the reported quarter benefited from higher
contract sales, customer expansion and lower fuel as well as
operating and maintenance (O&M) expenses. However, these were
offset by rising depreciation expense and general taxes.
GAAP loss during the quarter was 39 cents per share versus
earnings of 45 cents in the second quarter of 2012. The
difference between GAAP and operating earnings during the quarter
was due to the impact of a few one-time items such as 4 cents for
debt redemption, 2 cents for regulatory charges, 5 cents for
trust securities impairment, 85 cents for plant closing costs and
2 cents for merger accounting.
FirstEnergy generated total revenue of $3.5 billion in the
second quarter versus $3.8 billion in the year-ago quarter. The
6.3% revenue shortfall was primarily due to lower Electric sales
in the reported quarter, which dropped 6.0% year over year.
The top line of the company however outpaced the Zacks
Consensus Estimate of $3.4 billion by 4.5%.
Highlights of the Release
FirstEnergy's total electric distribution deliveries in the
reported quarter decreased 1% from the prior-year level.
Residential deliveries increased 2.5% while usage in the
commercial and industrial sectors decreased by 3.1% and 2.3%,
Total expenses in the reported quarter were $3.5 billion, up
8.4% from $3.2 billion in the prior-year quarter. The cost upturn
resulted from a 6% year-over-year increase in depreciation
Interest expenses in the reported quarter declined by $18
million year over year to $256 million.
FirstEnergy's cash in hand as of Jun 30, 2013, was $71 million
versus $172 million as of Dec 31, 2012.
Cash from operating activities in the second quarter of 2013
was $443 million versus $475 million in the prior-year
Long-term debt and other long-term obligations as of Jun 30,
2013, were $15.4 billion versus $15.2 billion as of Dec 31,
During the quarter under review FirstEnergy issued new debts
worth $445 million and redeemed debts of nearly $1,122
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 $1.39 to $1.69 per
Other Company Releases
American Electric Power Company Inc.
) posted adjusted second quarter 2013 operating earnings of 73
cents per share, missing the Zacks Consensus Estimate by 4
CMS Energy Corp.
) reported second-quarter 2013 operating earnings of 29 cents per
share, falling behind the Zacks Consensus Estimate of 35
DTE Energy Company
) reported second quarter 2013 earnings per share of 62 cents,
lagging the Zacks Consensus Estimate by 21.5%.
FirstEnergy yet again registered a positive earnings surprise
in the second quarter of 2013. The combination of asset
modernization efforts along with consistent customer growth will
offer the company a stable growth momentum. The total retail
customer base at the end of the second quarter was 2.7 million,
increasing 38% year over year.
Moreover, its strategy to increasingly shift to the retail
sales channel will aid FirstEnergy to effectively tackle the
low-price environment. FirstEnergy currently has a Zacks
Rank #3 (Hold).
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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