Pinnacle West Capital Corp.
) reported adjusted earnings per share of 14 cents which declined
36.4% from the year-ago quarter. Earnings nominally beat the
Zacks Consensus Estimate of 13 cents.
The earnings downturn in the reported quarter was due to
unfavorable weather in its service territories and lower
Quarterly revenue was $686.3 million, down 0.1% from the
year-earlier period. Revenue in the reported quarter also fell
short of the Zacks Consensus Estimate by 2.4%. The revenue
downturn was attributable to declining electricity sales volume
from the company's retail segment.
Total regulated electricity delivered in the quarter fell 1.7%
to 6,862 Gigawatt-hours (GWh) from 6,978 GWh in the year-ago
During the quarter, retail electricity sales decreased 6.5% to
5,612 GWh from 6,001 GWh a year ago. The decline was due to lower
electricity consumption by business as well as residential
On the cost side, fuel and purchased power costs climbed 8.3%
to $249.8 million from the year-ago quarter. The company's
operations and maintenance (O&M) expenses however decreased
4.6% year over year to $212.9 million due to a decline in
employee benefit costs.
Operating income dropped 13.5% year over year to $75.2 million
in the first quarter. The cost increase combined with lower
revenues ate into profitability.
As of Mar 31, 2014, Pinnacle West's cash and cash equivalents
were $103.4 million versus $9.5 million as of Dec 31, 2013.
Long-term debt as of Mar 31, 2014, was $3,045.6 million
compared with $2,796.5 million as of Dec 31, 2013.
The company generated $249.2 million in cash from operations
during the quarter, increasing 17.4% year over year.
Capital expenditure increased 13.4% year over year to $207.5
Pinnacle West estimates earnings in 2014 in the band
$3.60-$3.75 per share. Retail customer growth is anticipated to
be about 2.0%. Operating expenses are expected in the range of
$790 million to $810 million.
Other Utility Company Releases
Xcel Energy Inc.
) posted earnings per share of 52 cents, exceeding the Zacks
Consensus Estimate of 50 cents.
TECO Energy Inc.
) reported first quarter 2014 earnings of 23 cents per share,
edging past the Zacks Consensus Estimate of 22 cents.
NextEra Energy Inc.
) reported pro forma earnings of $1.26 per share, beating the
Zacks Consensus Estimate by 15.6%.
Pinnacle West reported unimpressive financial results in the
first quarter 2014 with revenue trailing and earnings barely
managing to clear our expectations. The colder-than-normal
weather in Arizona hit power demand which drove down sales.
However, the coming summer months could drive Pinnacle West's
sales. In addition, the company's effort to seize the growing
opportunities in the solar market through its large-scale AZ Sun
program will bode well for future growth.
Pinnacle West presently carries a Zacks Rank #3 (Hold).
NEXTERA ENERGY (NEE): Free Stock Analysis
PINNACLE WEST (PNW): Free Stock Analysis
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XCEL ENERGY INC (XEL): Free Stock Analysis
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