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Hawaiian Electric (HE) Q2 Earnings Lag; Revenues down Y/Y - Analyst Blog

Hawaiian Electric Industries Inc.HE reported adjusted earnings of 39 cents per share in the second quarter of 2015, and missed the Zacks Consensus Estimate of 45 cents by 13.3%. The quarterly number also fell 4.9% from the year-ago figure of 41 cents due to weak performance at its Electric Utility segment.

Including after-tax merger-related costs of $7.2 million associated with the pending merger with NextEra Energy, Inc. NEE and the spin-off of ASB Hawaii, the company's second-quarter earnings stood at 33 cents per share.

We remind investors that the company's shareholders have already approved the pending NextEra merger. Hawaiian Electric is presently preparing for the spinoff of its banking subsidiary, American Savings Bank, into an independent, publicly traded company.

Hawaiian Electric Industries Inc. - Earnings Surprise | FindTheBest

Total Revenue

Total revenue in the reported quarter was $623.9 million, down 21.9% year over year.

Operating Statistics

Total expenses were down 23% year over year to $551.2 million. Total operating income was $72.7 million, down 12.6% year over year mainly due to lower contributions from Electric Utility.

Segment Details

Electric Utility: Segment revenues in the reported quarter were $558.2 million, down 24.4% year over year. Net income decreased 4.1% to $32.8 million from $34.2 million a year ago. The downside resulted primarily from higher depreciation as well as operation and maintenance expenses in the quarter.

Banking: Segment revenues in the reported quarter were $65.8 million, up 8.6% year over year. Net income came at $12.9 million, up 11.4% from the year-ago quarter.

Other: The segment reported a quarterly net loss of approximately $10.7 million, wider than the year-ago loss of about $4.5 million.

Financial Update

Cash and cash equivalents as of Jun 30, 2015 were $300.7 million, up from $175.5 million as of Dec 31, 2014. Long-term debt, net other than bank, was $1,506.5 million, unchanged from the 2014-end level.

Cash from operating activities in the first half of 2015 was $104.3 million compared with $46.2 million a year ago. Capital expenditure totaled $142.2 million, down from $149.3 million in the prior-year quarter.

2015 Guidance

For 2015, the company maintained its guidance on rate base growth of 1.5% to 3%.

Excluding merger-related expenses, the company now expects earnings per share in the lower end of its previously guided range of $1.64 to $1.74. However, the company continues to expect bank earnings in the range of 50 cents to 54 cents per share and utility earnings in the range of $1.30 to $1.35.

Moreover, the three-year capital expenditure forecast for Electric Utility has been maintained in the range of $0.8 billion to $1.7 billion.

Other Peer Releases

American Electric Power Co., Inc. AEP reported second-quarter 2015 operating earnings of 88 cents per share, beating the Zacks Consensus Estimate of 81 cents by 8.6%.

PG&E Corporation's PCG adjusted operating earnings per share of 91 cents in the second quarter of 2015 outpaced the Zacks Consensus Estimate of 77 cents by 18.2%. The reported figure also surged 31.9% from the year-ago earnings.

Zacks Rank

Hawaiian Electric currently carries a Zacks Rank #3 (Hold).

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AMER ELEC PWR (AEP): Free Stock Analysis Report

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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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