Hawaiian Electric Industries Inc.
) posted third quarter 2013 earnings of 48 cents per share,
beating the Zacks Consensus Estimate by a penny. However,
earnings declined 2.0% year over year.
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The results reflect higher bank earnings that helped to offset
lower utility earnings. The year-over-year decline was mostly due
to a higher share count resulting from the issuance of shares
through a dividend reinvestment program. This program was aimed
to support the capital needs of Hawaiian Electric, Hawaii
Electric Light and Maui Electric Company.
Total revenue at the end of the reported quarter was $831.2
million, down 4.2% year over year. Reported results were also
below the Zacks Consensus Estimate of $865.0 million. The
downside reflects lower electric utility sales.
Total expenses were down 4.5% year over year to $741.1 million.
Total operating income was $90.1 million, down 1.7% year over
Segment Net Income
Segment net income declined 1.6% year over year to $37.8 million.
The results reflect higher depreciation expense and higher
operations and maintenance expense. However, these negatives were
partially offset by lower substation and generating station
maintenance expenses and higher net revenues.
Hawaiian Electric's Banking segment recorded net income of $15.3
million in the reported quarter, up 7.7% from $14.2 million in
the year-ago quarter. The year-over-year increase was driven by a
lower provision for loan losses, a net gain on the sale of the
credit card portfolio and higher fee income on other financial
products. These positives were offset by lower mortgage banking
income and lower fees from other financial services due to lower
The segment digested a quarterly net loss of $4.9 million, flat
year over year.
Cash and cash equivalents as of Sep 30, 2013, were $215.0
million, down from $219.7 million as of Dec 31, 2012. Long-term
debt, net other than bank was $1,422.9 million, approximately
flat year over year.
The company narrowed its GAAP earnings per share guidance to
$1.55 to $1.62 from its prior expectation of $1.52 to $1.62.
) announced third-quarter 2013 pro-forma earnings of 78 cents per
share, surpassing the Zacks Consensus Estimate by 12 cents.
Quarterly earnings edged up 1.3% year over year.
) adjusted earnings of $1.42 per share for the third quarter of
2013 were well ahead of the Zacks Consensus Estimate of $1.21 by
17.4% and the year-ago quarterly earnings of $1.00 by 42.0%. The
upside was driven by robust cost management initiatives along
with favorable tax benefits.
Though Hawaiian Electric's bottom line succeeded in beating the
Zacks Consensus Estimate, the top line fell short. Going forward,
lower electricity volume sales, a tourism-dependant Hawaiian
economy and uncertainty over the Japanese economy keep us
However, the company is progressing smoothly to comply with the
Hawaii Clean Energy Initiative that calls for generating 70% of
its energy needs from renewable sources by 2030. Year to date,
Hawaiian Electric Company has already provided nearly 18% of
customers' electricity usage from renewable sources. This is
higher than the 2015 renewable portfolio standard of 15%. The
company is also engaged in issuance of shares for its capital
The company presently has a short-term Zacks Rank #3 (Hold). In
the near term, we would advise investors to accumulate its
short-term Zacks Rank #1 (Buy) peer
NRG Yield Inc.