Pepco Holdings Inc
) reported third quarter 2013 net earnings of 44 cents per share,
in line with the Zacks Consensus Estimate. However, earnings were
16% higher than the year-ago earnings of 38 cents.
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The year-over-year increase in operating earnings was primarily
due to a rise in electric distribution revenue and lower
operation and maintenance expenses. The upside was limited by
lower weather-related sales in its service territories.
Pepco Holdings' total revenue in the third quarter was $1.344
billion, down 3.2% from $1.389 billion in the year-ago period.
Quarterly revenue also fell short of the Zacks Consensus Estimate
of $1.815 billion.
The year-over-year decline was primarily due to lower top-line
contribution from Power Delivery services as well as Pepco Energy
Highlights of the Release
In the third quarter, Pepco Holdings' total electric sales at
Power Delivery, was down 7.2% to 13,335 gigawatt hours (GWh). The
mild weather in its service territories impacted the demand for
Total operating expenses in the quarter declined 6.6% to $1.11
billion from $1.19 billion in the comparable year-ago period.
As of Sep 30, 2013, Delmarva Power's installations as well as
activation of smart meters has been completed in its Delaware
service territory but is ongoing in its Maryland service
territory. Pepco Holdings' installations as well as activation of
smart meters in the District of Columbia and Maryland service
zones stand nearly completed.
Pepco Holdings' cash and cash equivalents, including restricted
cash, were $73 million as of Sep 30, 2013, up significantly from
$35 million as of Dec 31, 2012. Long-term debts as of Sep 30,
2013 were $3.8 billion, up 4.3% from $3.6 billion as of Dec 31,
Pepco Holdings narrowed its 2013 earnings outlook to the range of
$1.08 to $1.18 per share from $1.05 to $1.20 per share. The
guidance assumes normal weather during the fourth quarter.
Other Company Releases
) reported third-quarter 2013 pro forma earnings of 78 cents per
share, surpassing the Zacks Consensus Estimate by 12 cents.
Quarterly earnings edged up 1.3% year over year.
) operating earnings from continuing operation of 18 cents per
share in the third quarter of 2013 were in line with the Zacks
Consensus Estimate. Earnings however jumped considerably from the
year-ago profit level of 4 cents.
Public Service Enterprise Group Inc
) reported third quarter 2013 earnings of 76 cents per share, in
line with the Zacks Consensus Estimate. Earnings were up 1.33%
year over year.
Pepco Holdings presented favorable year-over-year earnings
results in the reported quarter backed by effective cost control
initiatives and acceleration in distribution operations, though
the mild weather proved to be a deterrent.
Going forward, the company's aggressive investments towards
modernizing its utility infrastructure will act as a key growth
catalyst and will help retain its customer base. The company
stated to spend about $5.8 billion over the next five years to
replace aging infrastructure and installing advanced
Moreover, prudent capital outlay and continued implementation of
cost-containment measures will bode well for Pepco Holdings'
future development plans.
Pepco Holdings currently retains a Zacks Rank #4 (Sell).