) adjusted operating earnings per share of 79 cents in the second
quarter of 2013 were ahead of the Zacks Consensus Estimate of 72
cents, backed by its gas-related commitments. However, the
reported figure came in below the year-ago number of 81 cents by
On a reported basis, the company clocked earnings per share of 74
cents compared with earnings of 56 cents in the year-ago quarter.
PG&E's top line increased 5.1% to $3,776.0 million in the
quarter from $3,593.0 million in the year-ago period and
surpassed our expectation of $3,732.0 million. Electric revenue
generated $3,059.0 million in the quarter (up 4.4% year over
year), while Natural Gas clocked $717.0 million (up 8.3%).
On the cost front, total operating expenses stood at $3,140.0
million in the quarter, up from the year-earlier level of
PG&E affirmed its full year 2013 operating earnings guidance
range of $2.55-$2.75 per share.
The company retains a Zacks Rank #3 (Hold). In the near term, we
would advise investors to focus on its Zacks Rank #1 (Strong Buy)
Integrys Energy Group, Inc.
) and Zacks Rank #2 (Buy) peers
PG&E Corporation nevertheless has a solid portfolio of
regulated utility assets that offer a stable earnings base and
substantial long-term growth potential. The company strives to
optimize generation margins by improving its cost structure,
performance and reliability of its nuclear as well as fossil
Going forward, we expect the company's earnings growth to be
driven by favorable decisions from California Public Utilities
Commission (CPUC) and Federal Energy Regulatory Commission, as
well as long-term supply agreements, diversification into
alternative power sources and infrastructure improvement programs
resulting in rate base growth.
However, the present unfavorable macro backdrop, tepid demand for
electricity, any accidental charges or severe fluctuation in
prices keep us concerned.
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PG&E CORP (PCG): Free Stock Analysis
INTEGRYS ENERGY (TEG): Free Stock Analysis
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