Pinnacle West Capital Corp. 's ( PNW )
earnings of $2.21 per share in the third quarter of 2012 lagged the
Zacks Consensus Estimate of $2.23. Earnings exhibited a decline of
1.3% from $2.24 earned in the year-ago quarter. Earnings of $244.8
million inched down 0.4% year over year.NV ENERGY INC (NVE): Free Stock Analysis ReportPINNACLE WEST (PNW): Free Stock Analysis ReportUNS ENERGY CORP (UNS): Free Stock Analysis
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A combination of milder weather, higher operations and maintenance
expenses and lower retail electricity sales induced the company to
post weak numbers. However, lower infrastructure-related costs,
higher transmission revenues and regulatory settlement limited the
Pinnacle West reported revenue of $1.11 billion in the quarter,
declining 1.4% from the year-ago revenue of $1.12 billion. Revenues
fell short of the Zacks Consensus Estimate of $1.16 billion.
Total regulated electricity delivered in the quarter waned 1.1% to
10,276 Gwh from 10,396 Gwh in the prior year.
During the quarter, retail electricity sales decreased 9% to 9,064
Gwh from 9,432 Gwh last year. The decline was due to lower
electricity consumption by business as well as residential
Average electric customer growth in the quarter was 1.2%, compared
with 0.4% in the year-ago comparable period.
On the cost side, fuel and purchased power costs at the Regulated
Electricity segment decreased 10.4% in the quarter, while the
company's operations and maintenance (O&M) expenses increased
Depreciation & amortization expenses skidded 5.6% in the
quarter. These factors were largely responsible for a 4.1%
year-over-year overall increase in operating expense.
The magnitude of increase in expenses more than offset the
magnitude of revenue improvement, thereby driving operating income
to grow 3.0% in the quarter.
As of September 30, 2012, Pinnacle West's cash and cash
equivalents soared to $79.5 million from the 2011-end level of
Long-term debt of $3.4 billion increased 10.6% from the 2011-end
The company generated $929.5 million in cash from operations in
the first nine months of 2012, increasing1% over the prior-year
Capital expenditure elevated 4.3% year over year to $670.7
Pinnacle West expects retail customers to increase approximately
Total electricity gross margin is expected to be in the range of
$2.13 to $2.18 billion.
Operating expenses is expected to range from $1.32 to $1.35
billion, down from the prior guidance of $1.33 to $1.36 billion and
interest expense is expected to range between $180 to $190
Based on the combination of all these factors, the company expects
adjusted earnings in a range of $3.35 to $3.50 per share.
UniSource Energy Corporation ( UNS )
reported third quarter 2012 net income of 1.24 per share, exceeding
the Zacks Consensus Estimate by 3 cents.
NV Energy Inc. ( NVE )
reported third quarter 2012 earnings of 94 cents, exceeding the
Zacks Consensus Estimate by 5 cents.
We retain our Outperform recommendation on Pinnacle West Capital.
The quantitative Zacks #3 Rank (short-term Hold rating) for the
company indicates no clear directional pressure on the stock over
the near term.