Wisconsin Energy Inc.
) posted third-quarter 2012 earnings from continuing operations
per share of 67 cents, up 21.8% year over year from 55 cents per
share. The reported quarter's earnings also comfortably surpassed
the Zacks Consensus Estimate of 57 cents per share.
The significant increase was driven by warm summer temperatures,
lower operation and maintenance costs, stronger recovery of fuel
costs, and the company's share repurchase program.
Revenue in the third quarter of 2012 was $1.04 billion, down
1.28% from $1.05 billion in the year-ago quarter. Revenue also
fell short of Zacks Consensus Estimate by $32.7 million.
During the reported quarter, residential sales were down 1.2%
year over year. Electricity sales for small commercial and
industrial customers were up 0.7%, while it declined 8.3% for
large commercial and industrial customers.
Total operating expenses in the reported quarter were $758.7
million, down 8.4% from the prior-year period. The decline
reflects year-over-year decrease in fuel and purchased power
expenses, cost of gas sold and other operation and maintenance
expenses by 4.1%, 19.8% and 17.6%, respectively.
Decline in revenue was offset by a decrease in operating
expenses. As a result, operating income increased 25.1% year over
year to $280.6 million.
Cash and cash equivalents as of September 30, 2012 were $13
million versus $15.1 million as of September 30, 2011. Long-term
debt as of September 30, 2012 was $4,240.6 million versus
$4,618.9 million as of September 30, 2011.
At the Peer
One of the Wisconsin Energy's peers
DTE Energy Company
) recently reported third quarter 2012 earnings per share of
$1.31, easily beating the Zacks Consensus Estimate by 19 cents.
Results improved 22.4% year over year. Total revenue of DTE
Energy in the third quarter of 2012 was $2.21 billion, down 2.6%
year over year. The reported quarter's revenue also missed the
Zacks Consensus Estimate of $2.36 million.
Wisconsin Energy's earnings surpassed the Zacks Consensus
Estimate. However, it missed the revenue due to decline in
electricity sales from large commercial and industrial customers,
mainly resulting from planned outage at a major iron ore mine.
However, the outage is completed and demand from the iron ore
mines has returned to normal levels.
Moreover, the company continues to progress well at 50-megawatt
biomass-fueled power plant in northern Wisconsin. Installation of
the biomass plant will enable the company to diversify its
renewable energy portfolio. Wisconsin Energy's 'Power the Future'
plan is still contributing to earnings growth. However, we remain
concerned due to the current and future legislations that would
likely shoot up operating expenses.
The company presently retains a short-term Zacks #2 Rank (Buy).
We have a long-term Neutral recommendation on the stock.
Milwaukee, Wisconsin-based Wisconsin Energy Corporation is a
diversified holding company, engaged in generation and
distribution of electricity in southeastern, east central, and
northern Wisconsin, as well as in the upper peninsula of
Michigan. The company also distributes natural gas; and owns,
develops, and operates hydro, coal, nuclear, and wind electricity
generating facilities, as well as invests in other energy-related
entities. It also develops and invests in real estate.
DTE ENERGY CO (DTE): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
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