DTE Energy Company (DTE): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


DTE Energy reported upbeat performance in the fourth-quarter and full-year 2014, with both the top and bottom lines surpassing the Zacks Consensus Estimate. DTE Energy benefitted immensely from extreme temperatures in the first quarter of the year. The second and the third quarters, however, were challenging because of severe storms. The company's focus on improving efficiency through systematic investments is commendable. The company is planning to make capital investments of over $11 billion to drive growth through 2019. Focus on achieving operational excellence along with customer satisfaction will support the company in achieving its target. However, stringent government regulations and volatile commodity prices are causes of concern. Hence, we are maintaining our Neutral recommendation on the stock.


Incorporated in 1995, Detroit, MI-based DTE Energy Company (DTE) is a holding company with subsidiaries engaged in regulated and unregulated energy businesses.

DTE Electric Company and its subsidiaries (formerly known as The Detroit Edison Company) and DTE Gas Company and its subsidiaries (formerly known as Michigan Consolidated Gas Company) are its largest regulated subsidiaries.

DTE Energy also has three non-utility segments engaged in a variety of energy-related businesses. The company's unregulated businesses include gas storage and pipelines unconventional gas exploration, development and production power and industrial projects and coal transportation and marketing and energy marketing and trading operations.

Regulated Business

Electric Utility The electric segment consists of mainly DTE Electric Company. DTE Electric Company is a regulated electric utility serving roughly 2.1 million customers in southeastern Michigan, including Detroit, through primarily fossil-fuel powered plants. Electricity is generated by several fossil fuel plants, a hydroelectric plant and a nuclear plant, and energy is also purchased from electricity generators, suppliers and wholesalers. The electricity produced and purchased is sold to four classes of customers: residential, commercial, industrial, and wholesale, principally throughout southeastern Michigan. The company owns generating plants and facilities that are located in the state of Michigan.

Gas Utility The gas utility segment consists of DTE Gas and Citizens. DTE Gas is a gas utility that purchases, stores, transports and distributes natural gas throughout Michigan to around 1.2 million residential, commercial and industrial customers. Citizens is a gas utility that distributes natural gas in Adrian, MI to roughly 17,000 customers.

Unregulated Business

Gas Storage and Pipelines This division is engaged in natural gas pipelines, gathering and storage businesses, through DTE Pipeline and DTE Gas Storage. This segment owns partnership interests in two interstate transmission pipelines and controls two natural gas storage fields. The pipeline and storage assets are primarily supported by long-term, fixed-price revenue contracts.

Power and Industrial Projects Power and industrial projects comprise projects that deliver energy and utility-type services to industrial, commercial and institutional customers and generate reduced emission fuel and sell electricity from the biomass-fired energy facilities.

Energy Trading Energy Trading engages in power and gas marketing and trading.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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