) reported third-quarter 2012 pro forma earnings per share of 72
cents, beating the Zacks Consensus Estimate of 68 cents. However,
quarterly earnings per share were lower than the year-ago figure
of 76 cents due to lower earnings from the
segments; partially offset by an increase in the
GAAP earnings during the quarter were 61 cents compared with
76 cents in the year-ago quarter. The difference between GAAP and
pro forma earnings was due to a charge of 16 cents for
energy-related economic activities, 6 cents cost related to
foreign currency-based economic hedges and coal contract
modification related charge of 2 cents; partially offset by a 13
cents gain associated with changes in U.K. tax rate.
In the quarter under review, the company's total revenue was
$2.4 billion, declining from $3.1 billion in the prior-year
quarter. The downfall in revenue was due to a negative impact of
$716.0 million associated with the unrealized economic
activities; partially offset by an increase in utility,
unregulated retail electric and gas, realized wholesale energy
marketing and energy-related businesses revenues. The quarterly
revenue lagged the Zacks Consensus Estimate of $3.0 billion.
Total operating expenses in the reported quarter were $1.7
billion, down from $2.4 billion in the year-ago quarter due to
lower fuel operations expenses, and other operation and
In third-quarter 2012, the company's operating income was
$664.0 million compared with $767.0 million in the prior-year
Interest expenses were $248.0 million in third-quarter 2012,
up from the year-ago figure of $240.0 million due to an increase
in total debt level.
Cash and cash equivalents as of September 30, 2012 were $0.9
billion lower from $1.2 billion as of December 31, 2011.
As of September 30, 2012, long-term debt was $18.7 billion,
increasing from $18.0 billion as of December 31, 2011.
In the first nine months of 2012, the company generated cash
from operating activities of $2.1 billion, improving from $1.8
billion in the prior-year comparable period.
Full-Year 2012 Guidance
For full-year 2012, PPL Corporation revised its pro forma
earnings guidance in the range of $2.30 - $2.40 per share from
its earlier projection of $2.15 - $2.45 per share. GAAP earnings
guidance for full-year 2012 was revised to $2.37 to $2.47 per
share from its previous estimate of $2.33 - $2.63 per share.
PPL Corporation guided the mid-point of its full-year 2012
earnings per share expectation to $2.35, lower than the year-ago
earnings of $2.73 per share primarily due to a substantial
decline in energy margins at the supply segment. This was
partially offset by strong performance from the WPD Midlands
The mid-point of full-year 2012 earnings guidance for Kentucky
Regulated, U.K. Regulated, Pennsylvania Regulated and Supply
segments are 32 cents, $1.15, 21 cents and 67 cents,
respectively, compared with the year-ago segment-wise earnings of
40 cents, 87 cents, 31 cents and $1.15, respectively.
At the Peer
The AES Corporation
), a Virginia-based utility company, reported third-quarter 2012
adjusted earnings per share of 36 cents, beating the Zacks
Consensus Estimate of 35 cents and the year-ago figure of 17
In the reported quarter, the company's consolidated revenue
increased $280.0 million year over year to approximately $4.6
billion. The reported figure also beats the Zacks Consensus
Estimate of $4.5 billion. The upside came from contributions of
the company's new businesses, and recovery of pass through costs
of energy in Brazil. These increases were partially offset by the
unfavorable impact of foreign currency.
We view PPL Corporation as an organization with well
diversified asset portfolio following strong business models,
which are adaptable to a wide range of market coverage. The
company's diverse generation mix positions it to benefit from
proposed Environmental Protection Agency regulations.
In addition, PPL Corporation expects to achieve stable,
long-term growth from its regulated electricity delivery
businesses through efficient operations, and strong customer-base
and regulatory relations.
Like most of the utility providers of the Southeast and
Mid-Atlantic states, and New England of the U.S., PPL
Corporation's assets are also affected due to Hurricane Sandy.
The company's electric subsidiary, PPL Electric Utilities has
restored nearly 99.0% of power services out of the total
customer-consumption. We believe the company's strong liquidity
position along with its well-equipped back-up plans enable it to
handle this crisis in an efficient manner.
However, we are skeptical about stringent regulations, risks
associated with delay and cancellation of several important
PPL Corporation currently has Zacks #2 Rank (short term Buy
Allentown, Pennsylvania-based PPL Corporation generates and
delivers electricity and natural gas to more than 10 million
customers in the U.S. and UK. With a market capitalization of
$16.43 billion, the company has 17,722 full-time employees.
AES CORP (AES): Free Stock Analysis Report
PPL CORP (PPL): Free Stock Analysis Report
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