OGE Energy Corp.
), a distributor of natural gas and electricity primarily in the
south central United States, reported third quarter 2013 earnings
of $1.08 per share, surpassing the Zacks Consensus Estimate of 93
cents and the year-ago figure by 14.9%.
The upswing in the bottom line reflects sizeable returns from
the company's transmission projects and customer growth,
partially offset by a cooler summer.
Oklahoma Gas and Electric Company ("OG&E"), a division of
OGE Energy, contributed earnings of 86 cents per share in the
reported quarter, up from 84 cents in the year-ago quarter.
OGE Energy's interest in natural gas midstream operations
contributed earnings of 23 cents per share compared with earnings
from Enogex of 9 cents per share in the year-ago quarter.
The results take into account the split in the company's stock
price (2 new shares for 1 old share) that came into effect on Jul
OGE Energy's operating revenues in the third quarter declined
35% year over year to $723.2 million. This was chiefly
attributable to lower residential and off-system sales.
Sales of electricity to residential customers were 2.9
megawatt-hour (MWH) versus 3.2 MWH in the year-ago period. Sales
to commercial customers were 2.0 MWH versus 2.1 MWH in the
year-ago quarter. Sales to industrial customers were 1.1 MWH
versus 1.0 MWH in the year-ago period.
OGE Energy's consolidated gross profit was $450.2 million in
the reported quarter, down 21.5% from the year-ago quarter.
Total operating expenses in the quarter under review slipped
29.8% year over year to $189.3 million. Operating income of
$260.9 million declined 14.2% year over year.
In May 2013, OGE Energy,
CenterPoint Energy Inc.
), and ArcLight Capital Partners, LLC sealed their ambitious
midstream partnership, Enable Midstream Partners, the governance
of which will be shared by CenterPoint Energy and OGE on an equal
basis. OGE Energy holds a 28.5% limited partner interest and 50%
general partner interest in Enable Midstream Partners, LP.
Natural Gas Midstream Operations recorded an equity income of
$46 million for the third quarter of 2013 compared with $18
million in the corresponding year-ago period.
OGE Energy increased its consolidated earnings guidance for
2013 to the range of $1.80 to $1.90 per average diluted share
from the earlier range of $1.68 to $1.80 per average diluted
share. The guidance primarily considers the accretive impact of
the formation of Enable Midstream Partners.
) announced adjusted earnings of $1.42 per share for the third
quarter of 2013, well ahead of the Zacks Consensus Estimate of
$1.21 by 17.4%.
) posted operating earnings from continuing operation of 18 cents
per share in the third quarter of 2013, in line with the Zacks
The buoyant economy in Oklahoma will continue to help expand
the company's customer footprint. In addition, OGE Energy's
aggressive investments in alternative energy will spur its future
growth momentum given the current pro-environment drive in the
The company will capitalize on its midstream capabilities
given robust gas production in Oklahoma and the Texas Panhandle
region. Presently, OGE Energy retains a short-term Zacks Rank #2
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