Pinnacle West Capital Corp.
) reported adjusted earnings per share of $1.18 in the second
quarter of 2013 compared with $1.12 in the year-ago quarter.
Earnings also exceeded the Zacks Consensus Estimate of $1.14 by
A strong transmission performance, normal weather, and
non-fuel rate increases primarily drove earnings in the second
Quarterly revenue was $915.8 million, up 4.2% from the
year-ago revenue of $878.6 million. Revenue also surpassed the
Zacks Consensus Estimate by 2.8%.
Positive transmission rate changes effective from 2012 and Jun
2013 as well as a 1.3% year-over-year expansion in customer
footprint propelled Pinnacle West's top line.
During the quarter, retail electricity sales increased 5.5%
year over year to $864 million. The increase was due to higher
electricity consumption by business as well as residential
On the cost side, fuel and purchased power costs climbed 4.9%
to $277.6 million from the year-ago quarter. The company's
operations and maintenance (O&M) expenses also rose 6.05%
year over year to $229.3 million due to amortization of certain
retirement benefits in 2013.
Operating income rose 2.1% year over year to $259.8 million in
the second quarter.
As of Jun 30, 2013, Pinnacle West's cash and cash equivalents
were $27.8 million versus $26.2 million as of Dec 31, 2012.
Long-term debt as of Jun 30, 2013, was $2.8 billion compared
with $3.2 billion as of Dec 31, 2012.
The company generated $454.3 million in cash from operations
in the six months ending Jun 30, 2013 compared with $458.6
million in the six months ending Jun 30, 2012.
Pinnacle West increased its earnings estimates for 2013 to the
range of $3.55-$3.70 from the prior range of $3.45-$3.60 per
share. Retail customer growth is anticipated to be about 1.5%.
Operating expenses are expected to increase in the range of $1.37
billion to $1.40 billion from the previous range of $1.34 billion
to $1.37 billion.
Other Utility Company Releases
Xcel Energy Inc.
) posted earnings per share of 44 cents, exceeding the Zacks
Consensus Estimate by 15.8%.
TECO Energy Inc.
) reported second quarter 2013 earnings of 25 cents per share,
missing the Zacks Consensus Estimate by 3.8%.
NextEra Energy Inc.
) reported pro forma earnings of $1.46 per share, beating the
Zacks Consensus Estimate by 12.3%.
Pinnacle West yet again delivered favorable earnings surprises
in the second quarter. An improving Arizona housing market and
consistent customer additions will drive growth. The string of
solar investments under the company's AZ Sun solar program will
boost Pinnacle West's future profitability. The favorable desert
climate of Arizona will encourage more such solar endeavors.
In addition, the company's plans to bring online 275 miles of
transmission services over the next ten years will drive its
business. Pinnacle West presently carries a Zacks #2 Rank (Buy).
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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