Pinnacle West Capital Corp.
) reported adjusted earnings per share of 22 cents in the first
quarter of 2013 compared to a loss per share of 7 cents in the
year-ago quarter. Earnings also exceeded the Zacks Consensus
Estimate by a whopping 175%.
The improved earnings reflect higher retail electricity sales
due to cold winter, positive non-fuel rate changes and lower
infrastructure costs partially offset by increased operations and
Quarterly revenue was $686.7 million, up 10.6% from the
year-ago revenue of $620.6 million. Revenue also surpassed the
Zacks Consensus Estimate by 6.1%.
Expansion in customer footprint led to a rise in sales. Also,
implementation of increased transmission rate in 2012 caused the
Total regulated electricity delivered in the quarter inched up
2.1% to 6,947 Gigawatt-hours (GWh) from 6,802 GWh in the year-ago
During the quarter, retail electricity sales increased 4.5% to
6,001 GWh from 5,742 GWh last year. The increase was due to
higher electricity consumption by business as well as residential
Also, average electric customer growth in the quarter was 1.4%
compared with 0.8% in the year-ago comparable period.
On the cost side, fuel and purchased power costs climbed 6.7%
to $230.7 million from the year-ago quarter. The company's
operations and maintenance (O&M) expenses also rose 6% year
over year to $223.3 million due to an escalation in
performance-related benefit cost.
Operating income shot up 81% year over year to $86.9 million
in the first quarter. The greater revenue upsurge eclipsed the
cost increase resulting in substantial profit accretion.
As of Mar 31, 2013, Pinnacle West's cash and cash equivalents
were $25.1 million versus $26.2 million as of Dec 31, 2012.
Long-term debt as of Mar 31, 2013, was $3.3 billion compared
with $3.2 billion as of Dec 31, 2012.
The company generated $212.2 million in cash from operations
during the quarter, increasing 83.9% year over year.
Capital expenditure decreased 24.1% year over year to $182.9
Pinnacle West estimates earnings in 2013 to be on the higher
end of the $3.45-$3.60 per share range. Retail customer growth is
anticipated to be about 1.5%. Operating expenses are expected in
the range of $1.34 billion to $1.37 billion.
Other Utility Company Releases
Xcel Energy Inc.
) posted earnings per share of 52 cents per share, exceeding the
Zacks Consensus Estimate by 20.9%.
TECO Energy Inc.
) reported first quarter 2013 earnings of 19 cents per share,
surpassing the Zacks Consensus Estimate by 11.8%.
NextEra Energy Inc.
) reported pro forma earnings of $1.12 per share, beating the
Zacks Consensus Estimate by 10.9%.
Pinnacle West reported inspiring earnings and revenue results
in the first quarter with both beating our expectation. A
combination of sizeable midstream projects and strong customer
base will act as major growth drivers, going forward.
Moreover, the current renewable bandwagon in the U.S. will
bode well for the company's flagship AZ Sun solar program thereby
contributing to profitability.
However, stringent pro-environment regulations will continue
to add to the company's cost. Pinnacle West presently carries a
Zacks #3 Rank (Hold).
Phoenix, Arizona-based Pinnacle West Capital Corporation
provides electricity services in the state of Arizona, through
its subsidiaries. The company is involved in the generation,
transmission, and distribution of electricity from coal, nuclear,
gas and oil, and renewable resources.
NEXTERA ENERGY (NEE): Free Stock Analysis
PINNACLE WEST (PNW): Free Stock Analysis
TECO ENERGY (TE): Free Stock Analysis Report
XCEL ENERGY INC (XEL): Free Stock Analysis
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