Wisconsin Energy Inc.
) announced its first quarter 2012 earnings of 74 cents in contrast
to 72 cents per share in the year-ago quarter, indicating a surge
of 2.7%. Earnings in the current quarter surpassed Zacks Consensus
estimate of 73 cents per share.
This earnings outperformance can be attributed to robust
recovery of fuel costs from power generation, decline in company's
operation and maintenance costs and strong share repurchase
activities. These positives were partially offset by lower demand
due to warmer temperature in the winter season.
Revenue in the first quarter of 2012 was $1.19 billion down
10.5% from $1.33 billion in the year-ago quarter. Revenue fell
short of Zacks Consensus Estimate of $1.29 billion.
The lower revenue was factored by weak customer demand owing to
mild winter weather. The reasons for the fall in demand can be
traced back to a 2.1% fall in electricity consumption by small
commercial and industrial customers and 4.3% less residential
electricity users from the year-ago quarter.
Moreover, demand for natural gas among residential consumers
dropped markedly by 24% from the comparable year-ago
Total operating expenses in the first quarter of 2012 was $895.5
million down 13.3% versus $1,033.1 million in the year-ago quarter.
The decline ensued from the cost of gas sold that fell 30.6% along
with operation and maintenance costs, which dropped 8.6%.
Total operating income was flat with the year-ago quarter. This
was due the adverse effect of the revenue decline that was
compensated by lower operating costs.
Interest expense also witnessed a 7% decrease to $58.9 million
from $63.4 million in the year-ago quarter, owing to lower
Cash and cash equivalents as of March 31, 2012 was $18.1 million
versus $14.1 million as of December 31, 2011.
Long-term debt as of March 31, 2012 was $4,602.8 million versus
$4,614.3 million as of December 31, 2011.
Capital expenditure during the first quarter 2012 was $142.3
million compared to $135.5 million in the first quarter of
The company earnings per share projection is in the range of
$2.24 to $2.29 per share.
Xcel Energy Inc.
), a competitor of Wisconsin Energy, announced operating earnings
for the first quarter of 2012 of 41 cents per share, down 4 cents
from the year-ago quarter. It modestly surpassed the Zacks
Consensus Estimate by 4 cents.
Revenue fell 8.4% to $2,578.0 million in the reported quarter
from $2,817.0 million in the year-ago period. The quarter's revenue
also fell short of the Zacks Consensus Estimate of $2,832.0
Wisconsin Energy's earnings performance beat Zacks Consensus
Estimate although poor revenues stuck out. The surge in its
residential and industrial customer bases is a positive sign for
However, constraining factors like temperature fluctuations
could lower demand for electricity and natural gas.
Wisconsin Energy holds a Zacks #4 Rank, which translates to a
short-term Sell rating. We have a Neutral recommendation for
the long term.
Based in Milwaukee, Wisconsin, the company is involved in the
generation, distribution and sale of electric energy and steam. It
is also engaged in the purchase, distribution, transportation and
sale of natural gas.
WISC ENERGY CP (
): Free Stock Analysis Report
XCEL ENERGY INC (
): Free Stock Analysis Report
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