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PPL Corp. (PPL) Beats Q3 Earnings Estimates on New Rates

PPL CorporationPPL reported third-quarter 2017 adjusted earnings of 56 cents per share, beating the Zacks Consensus Estimate of 53 cents by 5.7%. Earnings benefited from the new electricity and gas rates effective from the third quarter.

However, earnings declined 11.1% year over year, primarily due to lower foreign currency exchange rates and unfavorable weather in the United States.

On a GAAP basis, the company reported earnings per share of 51 cents in the quarter compared with 69 cents a year ago. The difference between GAAP and operating earnings in the reported quarter was due to a loss of 5 cents from foreign currency-related economic hedges.

Total Revenues

PPL Corp.'s total revenues were $1,845 million in the third quarter, missing the Zacks Consensus Estimate of $1,895 million by 2.6%. Revenues also decreased 2.3% year over year.

PPL Corporation Price, Consensus and EPS Surprise

PPL Corporation Price, Consensus and EPS Surprise | PPL Corporation Quote

Segment Results

U.K. Regulated : Adjusted earnings decreased 31.4% year over year to 24 cents per share.

Kentucky Regulated : Adjusted earnings were 18 cents, in line with the year-ago quarter. Higher base electricity and gas rates effective Jul 1, 2017, were offset by lower sales volumes due to unfavorable weather.

Pennsylvania Regulated : Adjusted earnings in the quarter were 13 cents, in line with the year- ago quarter. Higher transmission earnings due to additional capital investments and lower operation and maintenance expenses were offset by lower sales volumes due to unfavorable weather

Corporate and Other : It includes unallocated corporate-level financing and other costs. The segment reported a gain of 1 cents for the quarter against a loss of 3 cents in the prior-year quarter.

Operational Highlights

PPL Corp.'s total operating expenses decreased 3.2% year over year to $ 1,068 million in the reported quarter.

The company reported operating income of $777 million, down 1.1% from $786 million a year ago.

Interest expenses increased 3.1% to $230 million from $223 million a year ago.

Financial Position

As of Sep 30, 2017, PPL Corp. had cash and cash equivalents of $676 million compared with $341 million as of Dec 31, 2016.

Long-term debt (excluding debts due within one year) was $19,110 million as of Sep 30, 2017, compared with $17,808 million at the end of 2016.

In the first nine months of 2017, net cash flow from operating activities was $1,754 million compared with $2,230 million in the prior-year period.

Guidance

PPL Corp. raised its 2017 adjusted earnings guidance in the range of $2.10 to $2.25 per share from the prior expectation of $2.05-$2.25, taking into consideration better-than-expected U.K. Regulated segment performance.

The midpoints of the 2017 adjusted earnings guidance for the U.K. Regulated, Kentucky Regulated and Pennsylvania Regulated segments are $1.24, 56 cents and 50 cents, respectively. For the Corporate & Other segment, the midpoint of the full-year projection is at a loss of 11 cents per share.

The company also reaffirmed its compound earnings growth guidance of 5% to 6% from 2017 through 2020.

Zacks Rank

PPL Corp. currently has a Zacks Rank #4 (Sell).

Peer Releases

WEC Energy Group WEC , a Zacks Rank #2 (Buy) stock, reported third-quarter 2017 operating earnings of 68 cents per share, beating the Zacks Consensus Estimate of 67 cents by 1.5%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

NextEra Energy, Inc. NEE , a Zacks Rank #3 (Hold) stock, reported third-quarter 2017 adjusted earnings of $1.85 per share, beating the Zacks Consensus Estimate of $1.77 by 5.7%.

FirstEnergy Corp. FE , a Zacks Rank #3 stock, reported operating earnings of 97 cents per share, beating the Zacks Consensus Estimate of 86 cents by 12.8%.

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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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