Integrys Energy Group, Inc.
) reported first quarter 2014 pro forma earnings of $1.73 per
share, down marginally by 1.7% from the year-ago quarter.
Earnings also trailed the Zacks Consensus Estimate by 4.4%.
The combination of lower retail electric margins and increased
operating costs proved to be a drag on earnings. The negative
impact was partially offset by expansion in natural gas retail
GAAP earnings were $1.89 per share compared with $2.37 per share
in year-earlier period. The difference between quarterly GAAP and
pro forma earnings was due to a 16 cent gain from derivative and
inventory accounting activities.
Integrys Energy's total revenue shot up 74.3% year over year to
$2,924.9 million. Reported revenue also comfortably beat the
Zacks Consensus Estimate by 79.4%.
The revenue upturn resulted from a whopping 136% and 43.8% sales
increase from the company's non-regulated as well as regulated
business divisions, respectively.
Total electric sales volume from the regulated segment declined
7.1% year over year to 3,671.6 million kilowatt-hours ("Kwh").
However, an 18.4% year-over-year increase in retail gas
throughput volumes to 2,006.8 million therms substantially
eclipsed the electric volume downside.
In the non-regulated segment, retail electric sales volume in the
first quarter was 6,356.9 million Kwh versus 4,318.2 million Kwh
in the comparable year-ago period. Retail natural gas sales
volume was 87.6 billion cubic feet ("Bcf") compared with 50.7 Bcf
in the year-ago quarter. Wholesale electric sales volume was 14.1
million Kwh versus 18.0 million Kwh in the year-ago quarter.
Total operating expenses jumped 92.9% year over year to $2,671.7
million. This was mainly due to a massive 185.6% rise in
non-regulated sales expenses. The cost increase was further
aggravated by a 69.9% rise in utility fuel, gas and purchased
Spiraling costs overshadowed the revenue upside pulling down the
company's operating income by 13.6% year over year to $253.2
Cash and cash equivalents were $56.6 million as of Mar 31, 2014
compared with $22.3 million as of Dec 31, 2013. As of Mar 31,
2014, long-term debt remained flat at $2,956.2 million.
Net cash generated from operating activities during the quarter
was $263.3 million compared with $319.6 million in the year-ago
As of Mar 31, 2014, capital expenditure was $159.6 million versus
$147.0 million as of Mar 31, 2013.
Integrys Energy Group expects 2014 pro forma earnings in the band
of $3.50-$3.75 per share. GAAP earnings for 2014 are expected to
be in the range $4.10-$4.35 per share.
Other Company Releases
TECO Energy Inc
) first quarter 2014 earnings of 23 cents per share edged past
the Zacks Consensus Estimate of 22 cents.
NextEra Energy Inc
) reported pro forma earnings of $1.26 per share beating the
Zacks Consensus Estimate by 15.6%.
) reported earnings of 82 cents per share, which surpassed the
Zacks Consensus Estimate by 5.1%.
Integrys Energy's earnings were let down in the first quarter
2014 owing to the company's spiraling operating costs and a soft
retail electric business.
However, we expect the company to remain well positioned in the
market on the back of its electric and gas investments, which
will stimulate future asset development. Moreover, steady
expansion of its compressed natural gas stations across the U.S.
will offer increasing growth avenues in the years ahead. Integrys
Energy currently carries a Zacks Rank #2 (Buy).
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INTEGRYS ENERGY (TEG): Free Stock Analysis
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