DTE Energy Company
) reported third quarter 2012 earnings per share of $1.31, easily
beating the Zacks Consensus Estimate by 19 cents. Results
improved 22.4% year over year.
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DTE ENERGY CO (DTE): Free Stock Analysis
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The upside came on the back of warm weather at Detroit Edison,
MichCon's improved performance and growth in reduced emissions
fuel at Power & Industrial projects. However, lower earnings
at Energy Trading limited the upside to some extent.
Total revenue of DTE Energy in the third quarter of 2012 was
$2.21 billion, declining 2.6% year over year. The reported
quarter's revenue also missed the Zacks Consensus Estimate of
Fuel, purchased power and gas expenses declined 12% year over
year to $761 million. However, operation and maintenance
expenses were up 3.3% year over year to $692 million.
The decline in revenue was more than offset by decline in total
expenses, resulting in a meager increase in operating income.
Operating income was $410 million, versus $399 million in the
: Segment earnings during the reported quarter were $194 million
or $1.13 per share, up from $57 million or 92 cents in the
: Segment profit in the third quarter was $4 million or 2 cents
per share, reversing the loss of $11 million or 6 cents per share
a year ago.
Gas Storage and Pipelines
: The segment generated profit of $14 million or 8 cents per
share versus $13 million or 8 cents per share in the year-ago
Power and Industrial Projects
: The segment posted a profit of $22 million or 13 cents per
share, up from $12 million or 7 cents per share in the year-ago
: The segment posted a profit of $1 million or 1 cent per share
versus $22 million or 13 cent per share in the third quarter of
Corporate and Other
: Loss in the quarter was $8 million or 6 cents per share, flat
with year-ago level.
As of September 30, 2012, cash and cash equivalents were $59
million, down from $68 million at the end of December 31, 2011.
At the end of the quarter, long-term debt, net of current
portion, was $7.12 billion versus $7.19 billion at the end of
December 31, 2011.
The company raised its earnings guidance for 2012 to the range of
$3.80 to $4.00 per from $3.65 to $3.95 per share.
DTE Energy easily surpassed our bottom line expectations. The
company is on track to meet its goals based on its investments in
renewable energy, environmental controls and utility
Going forward, stable and growing utilities and its complementary
non-utility businesses, higher authorized rates for its regulated
business, and growth opportunities in its un-regulated businesses
will continue to be the growth drivers for the company. However,
we remain concerned about the present unfavorable macro backdrop,
lower demand for electricity, the dismal economy in Michigan
state and pending regulatory cases of the company.
We have a Neutral recommendation on DTE Energy. It currently
holds a Zacks #2 Rank translating into a short-term Buy rating.
CenterPoint Energy, Inc.
), which closely competes with DTE Energy holds Zacks #3 Rank,
translating into a short-term Hold rating. The company is
scheduled to release its earnings results before the opening bell
on November 7.