) operating earnings per share of 59 cents in the fourth quarter
of full year 2012 beat the Zacks Consensus Estimate of 58 cents.
However this came below the year-ago number of 89 cents. On a
reported basis, the company clocked loss per share of 3 cents
compared with earnings of 20 cents in the year-ago quarter.
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Full year 2012 operating earnings came in at $3.22 per share,
beating the Zacks Consensus Estimate of $3.20. The reported
figure was, however, lower than the full year 2011 earnings of
$3.58 per share. On a reported basis, full year 2012 earnings
were $1.92 per share versus full year 2011 earnings of $2.10 per
Full Year 2012 Revenue Update
PG&E's revenue increased to approximately $15.04 billion in
full year 2012 versus $14.96 billion in full year 2011, lower
than the Zacks Consensus Estimate of $15.32 billion. Electric
revenues rose year over year to $12.02 billion from $11.61
billion. Natural Gas revenues fell to $3.02 billion from $3.35
PG&E affirmed its full year 2013 operating earnings guidance
range of $2.55-$2.75 per share.
Going forward, PG&E will continue to focus on investing new
capital, consistent with California's focus on clean energy. The
company is mandated by California's renewable energy portfolio
standard to raise its renewable generation. California's
renewable portfolio standard requires utilities to generate 33%
of power from renewable sources by full year 2020.
We believe, going forward, favorable decisions from regulators,
long-term supply contracts, diversification into alternative
power sources and infrastructure improvement programs (such as
Cornerstone and Smart Meter) will bode well for the company.
These positives, however, will be partially offset by risks,
including the present tepid macro backdrop, headwinds in the
California economy, earnings dilutive issuances and power-price
We have a Zacks Rank #3 (short-term Hold rating) on the stock.
This implies that the stock is expected to perform lower versus
the broader U.S. equity market over the next 1-3 months.
Consequently, we advise investors not to take any position on the
stock for the time being.
In the near-term, we would advise investors to focus on its Zacks
Rank #1 (short-term Strong Buy rating) peers like
Otter Tail Corporation
Pike Electric Corporation
), all carrying a Zacks Rank #1 (Strong Buy).