Integrys Energy Group, Inc.
) reported second quarter 2013 pro forma earnings of 45 cents per
share, up 66.7% from the year-ago quarter. Earnings also breezed
past the Zacks Consensus Estimate of 32 cents by 40.6%.
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The upside was due to healthy margins at the natural gas utility
segment and positive impact from decoupling mechanisms related to
People Gas, North Shore Gas and Minnesota Energy Resources units.
GAAP loss was 7 cents per share in the reported quarter compared
with earnings of 62 cents in the second quarter of 2012. The
difference between the quarterly GAAP loss and pro forma earnings
was due to a 51 cent loss from derivative as well as inventory
accounting activities and a 1 cent loss from discontinued
Integrys Energy's total revenue surged 32.9% year over year to
$1,116.0 million. Reported revenues also outstripped the Zacks
Consensus Estimate by 33.2%.
The top line upswing reflects favorable sales from the company's
regulated as well as non-regulated business divisions.
Integrys Energy's total gas retail throughput volumes from the
regulated segment rose 40.9% year over year to 332.7 therms.
Electric sales volumes however witnessed a marginal fall to
3,942.1 Kilowatt-hours ("Kwh") from 3,950.9 Kwh in the prior-year
In the non-regulated segment, retail electric sales volume in the
second quarter was 4,838.1 million Kwh versus 3,082.7 million Kwh
in the comparable year-ago period. Retail natural gas volume was
up 73.4% to 37.1 billion cubic feet from the year-ago quarter.
Integrys Energy's cost pressure escalated with operating expenses
rising 49.2% year over year to $1,122.9 million. Non-regulated
cost of sales spiraled 132.9% year over year to $447.9 million in
the second quarter while fuel, gas and purchased expenses
increased 31% year-over-year.
The rise in cost completely offset the revenue upturn, leading to
Integrys Energy incurring an operating loss of $6.9 million in
the reported quarter.
Integrys Energy's cash and cash equivalents were $20.2 million as
of Jun 30, 2013 compared with $27.4 million as of Dec 31, 2012.
As of Jun 30, 2013, long-term debt was $1,886.2 million compared
with $1,931.7 million as of Dec 31, 2012.
Net cash generated from operating activities in the first half of
2013 was $448.0 million compared with $431.9 million in the first
half of 2012.
Capital expenditure at the end of Jun 30, 2013 was $153.1 million
versus $126.2 million at the end of Jun 30, 2012.
Guidance for 2013
Integrys Energy narrowed its 2013 pro forma earnings in the band
of $3.35-$3.60 per share from the previous range of $3.25-$3.60
per share. The company estimates GAAP earnings for 2013 in the
range of $3.41-$3.66 per share.
Other Utility Company Releases
TECO Energy Inc.
) reported second quarter 2013 earnings of 25 cents per share
lagging the Zacks Consensus Estimate by 3.8%.
Xcel Energy Inc.
) reported pro forma earnings of 44 cents per share beating the
Zacks Consensus Estimate by 15.8%.
CenterPoint Energy Inc.
posted adjusted earnings per share of 30 cents surpassing the
Zacks Consensus Estimate of 27 cents.
Integrys Energy retained it successful earnings run by reporting
substantial bottom line surprise in the second quarter. The
improving gas price is expected to continue to fetch lucrative
returns for the company.
Integrys Energy's large-scale modernization endeavors like the
recently announced 5-year System Modernization and Reliability
Project will strengthen its service reliability, thereby leading
to consumer retention in the future.
In addition, given the positive U.S. auto market fundamentals,
the company's efforts to expand its compressed natural gas
fueling network will certainly diversify growth opportunities.
Integrys Energy currently carries a Zacks Rank #2 (Buy).