Integrys Energy Group Inc.
) reported adjusted earnings of 89 cents per share, declining 11%
from the year-ago earnings of $1.00 per share. The earnings
trailed the Zacks Consensus Estimate by 5.3%.
The decrease in earnings was due to lackluster performance
from Integrys Energy Service business and rate case effects
related to the company's subsidiary, Wisconsin Public Service
GAAP earnings were 86 cents in the reported quarter compared
with 49 cents in the fourth quarter 2011. The difference between
GAAP and pro forma earnings of 3 cents was due to a non-cash loss
associated with derivative and inventory accounting
In 2012, Integrys Energy's adjusted earnings were $3.26 per
share versus $3.34 per share in 2011. Earnings marginally fell
short of the Zacks Consensus Estimate of $3.29 per share.
The company also reported yearly GAAP earnings of $3.55 per
share, higher than the year-ago figure of $2.87 per share.
Integrys Energy's quarterly revenue was $1,197.2 million, up
6.2% from $1,127.3 million in the prior-year quarter. Revenue
also beat the Zacks Consensus Estimate by 14%.
Utility segment revenue was $842.6 million in the reported
quarter, falling 2% from $858.8 million in the year-ago period.
This was on account of unfavorable returns from the wholesale as
well as retail electric utility businesses owing to mild weather
conditions, partially offset by positive rate changes in the
natural gas business.
In 2012, the company's top line plummeted 10.1% to $4,212.4
million from $4,685.9 million in the prior year. The 2012 top
line also fell behind the Zacks Consensus Estimate by 13%.
In the reported quarter, Integrys Energy's fuel, natural gas
and power costs dropped 5.6% to $399.9 million from $423.7
million in year-ago quarter. Operating and maintenance costs,
however, increased 6.7% year over year to $282.7 million in
fourth quarter 2012. Total cost for the quarter was $1,078.4
million compared with $1,065.9 million in the year-ago
Operating income increased 93.5% to $118.8 million from $61.4
million in the year-ago quarter. The minimal cost increase offset
by greater revenue upsurge led to higher profit.
Interest expense for the quarter remained flat at $30.2
million from the comparable year-ago period.
Cash and cash equivalents of Integrys Energy as of Dec 31,
2012 were $27.4 million, down from $28.1 million as of Dec 31,
2011. Long-term debt rose to $1,931.7 million from $1,845.0
million as of Dec 31, 2011.
Net cash generated from operating activities at the end of
2012 was $569.0 million versus $717.8 million in the
corresponding period last year. Capital expenditure for the
twelve-month period totaled $594.3 million, compared with $310.1
million in the year-ago period.
Integrys Energy Group expects 2013 GAAP earnings in the range
of $3.03-$3.53 per share. The regulated natural gas utility
segment is expected to contribute in the range of $1.00-$1.35 per
share while electric utility is estimated to record earnings in
the band of $1.25-$1.33 per share.
The transmission segment is anticipated to provide earnings of
69 cents to 70 cents in 2013. Pro forma earnings for 2013 are
expected in the range $3.05-$3.55 per share.
Other Utility Company Releases
The AES Corporation
) reported fourth quarter 2012 adjusted earnings per share of 32
cents, edging out the Zacks Consensus Estimate of 30 cents.
Brookfield Infrastructure Partners L.P.
) fourth-quarter 2012 operating earnings were 25 cents per unit,
lower than the Zacks Consensus Estimate of 58 cents.
CMS Energy Corporation
) clocked earnings for the fourth quarter 2012 of 25 cents per
share on both an adjusted and GAAP basis, beating the Zacks
Consensus Estimate of 24 cents.
Integrys Energy posted mixed financial results for the fourth
quarter 2012 with the top line beating our expectation while
bottom line falling short. We anticipate Integrys Energy to
derive significant benefits from the expected rise in natural gas
prices. In addition, customer base expansion and advancement in
the pipeline replacement projects are anticipated to act as
tailwinds in the near term.
However, the Energy business could likely pose challenges
given increased competition. Moreover, the company is expected to
be under cost pressure from the modernization of its plants owing
to a settlement with the Environmental Protection Agency
Integrys Energy Group Inc. currently retains a Zacks Rank #3
(Hold). Based in Chicago, IL, the company is a diversified
holding company providing products and services in both regulated
and non-regulated energy markets, through its subsidiaries.
AES CORP (AES): Free Stock Analysis Report
BROOKFIELD INFR (BIP): Free Stock Analysis
CMS ENERGY (CMS): Free Stock Analysis Report
INTEGRYS ENERGY (TEG): Free Stock Analysis
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