On Jun 17, 2014, the share price of
Westar Energy Inc.
) hit a 52-week high of $36.57. Finally, the shares closed at
$36.43, reflecting a year-over-year gain of 19.5%. The company had
reported strong first-quarter results with a positive earnings
surprise of 15.6%. Westar Energy registered earnings surprises in
the last four quarters, with an average beat of 13.01%.
On May 7, Westar Energy reported first-quarter 2014 operating
earnings per share of 52 cents, which exceeded the Zacks Consensus
Estimate of 45 cents. Reported earnings also surpassed the 40 cents
per share earned in the year-ago quarter.
Westar Energy's upbeat first quarter results benefited from higher
energy sales due to harsh winter weather and higher prices from
investments in air quality control and transmission infrastructure.
Based on its strong performance, management at Westar Energy
increased its 2014 earnings guidance to $2.30 to $2.45 per share.
Westar Energy had already taken advantage of the favorable interest
rates and refinanced some of its debts. The company is planning to
refinance more debts at favorable rates. Refinancing will allow the
company to use the funds for a longer period of time at a cheaper
Westar Energy's capital spending program amply reveals its plans to
upgrade its existing utility assets and add new ones to its
generation portfolio. Westar Energy aims at investing nearly $2.1
billion within 2014 and 2016, with $814 million planned for this
year. We believe consistent capital investments will enable Westar
Energy to serve more customers efficiently, thereby boosting its
A major share of Westar Energy's power generation comes from
natural gas and wind assets. This will definitely benefit the
company as the Environmental Protection Agency recently proposed a
rule that would lower carbon emissions from power plants by 30% by
2030 from 2005 levels.
Westar Energy currently carries a Zacks Rank #3 (Hold). Other
stocks in this industry such as
NRG Energy, Inc.
Korea Electric Power Corp.
) carry a favorable Zacks Rank #1 (Strong Buy).
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