Public Service Enterprise Group Inc.
) reported first quarter 2013 earnings of 85 cents per share,
beating the Zacks Consensus Estimate of 74 cents by 14.9%. This
was mainly attributable to increased investment at PSE&G and
solid performance from PSEG Power segments. However, earnings
were in line with the year-ago figure.
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Revenue in the reported quarter was $2,786.0 million, down 3.1%
from the year-ago figure of $2,875.0 million and 6.4% from the
Zacks Consensus Estimate of $2,976.0 million.
In the first quarter, the company registered a boost in both
electric and gas sales volume. Electric sales volumes in the
reported quarter increased 0.9% year over year to 9,923 million
kwh, while gas sales volume were up 17.1% to 871 million therms.
Highlights of the Release
Total operating expenses were $2,176.0 million, up 4.0% from the
year-ago level. The increase in total expenses was primarily due
to a 13.1% year-over-year rise in operating and maintenance costs
as well as a 13.3% jump in depreciation and amortization
Higher expenses compounded by a very weak top line led to lower
operating income. As a consequence, operating income dropped
22.1% to $610.0 million.
Segment operating earnings were $250.0 million in the quarter, up
from $196.0 million in the prior-year period. A solid energy
market, higher capacity prices, and an increase in generation
resulted in the upswing.
The segment generated operating earnings of $179.0 million, down
9.1% from the prior-year quarter. Results reflect the absence of
tax settlement in the year-ago quarter that more than offset the
positive contribution from capital investments.
PSEG Energy Holdings:
Segment operating earnings were $4.0 million, down from the
prior-year figure of $39.0 million.
Cash and cash equivalents as of Mar 31, 2013 were $420.0 million
versus $379.0 million on Dec 31, 2012.
Long-term debt as of Mar 31, 2013 was $7,417.0 million versus
$7,173.0 million at 2012 end.
Cash flow from operating activities was $877.0 million compared
with $1,088.0 million in the first quarter 2012.
The company reaffirmed operating earnings per share for 2013 in
the range of $2.25 to $2.50. The group expects the year to
benefit from its proposed 10-year $3.9 billion Energy Strong
The company forecasts operating earnings from PSE&G to range
from $580 million to $635 million, earnings from PSEG Power to
range from $535 million to $600 million and PSEG Energy
Holding/Energy to range from $25 million to $35 million.
The company currently has a Zacks Rank #3 (Hold). Stocks that
look better positioned are
Brookfield Infrastructure Partners L.P.
CMS Energy Corporation
Empresa Nacional de Electricidad S.A.
), all with a Zacks Rank #1 (Strong Buy).