Dominion Resources Inc. (D) reported second quarter 2013 operating earnings of 62 cents per share, 4.6% lower than the Zacks Consensus Estimate of 65 cents. However, earnings were higher than the year-ago results by 5%.
The year-over-year upside was primarily due to higher revenues related to gas transmission growth projects and higher rate adjustment clause revenues.
GAAP earnings were 35 cents versus 45 cents in the year-ago quarter. The difference between GAAP and operating earnings in the reported quarter was due to a one-time impact of 27 cents from discontinued operations, expense for gas infrastructure & repositioning, cost cutting initiative expenses and other one-time items.
Operational Update
Dominion’s operating revenue of $2.96 billion in the second quarter decreased 1.6% year over year. The decline in the top line was primarily due to lower contribution from Dominion Virginia Power and Dominion Generation, marginally offset by another strong performance from Dominion Energy.
However, total revenue came ahead of the Zacks Consensus Estimate of $2.94 billion.
Total operating expenses in the second quarter decreased 1.4% year over year to $2.26 billion. The decline was due to lower electric fuel and other energy related purchases, purchased electric capacity and lower operations and maintenance expenses, offset marginally by increase an in purchased gas expenses..
Segment Update
Dominion Virginia Power recorded revenue of $778 million in the second quarter of 2013, down 5% year over year. Operating earnings in the quarter also declined 7.7% year over year to $132 million.
Dominion Energy reported revenue of $629 million, up 6.4% year over year. Operating earnings came in at $124 million, up 13.8% year over year.
Dominion Generation’s revenue declined 3.2% year over year to $1.59 billion. Segment operating earnings increased 8.6% over the prior-year quarter to $165 million.
Financial Update
Dominion exited the quarter with cash and cash equivalents of $190 million, down from $248 million as of Dec 31 2012.
Long-term debt at quarter end increased to $18.04 billion from $16.85 billion at prior-year end.
Cash from operating activities in the first half of 2013 decreased to $1.79 billion from $2.39 billion in the year-ago period.
Looking Ahead
Dominion expects to deliver third quarter operating earnings in a range of 85 cents to 95 cents per share. The third quarter 2013 results are likely to benefit from higher rate adjustment clause revenues and anticipated sales growth in its electric service territory and higher projected revenues related to its gas transmission growth projects.
Dominion affirmed full year 2013 operating earnings in a band of $3.20–$3.50 per share.
Other Company Releases
American Electric Power Co., Inc.’s (AEP) earnings per share of 73 cents in the second quarter 2013 lagged the Zacks Consensus Estimate of 74 cents by 5.19%.
NiSource Inc.’s (NI) earnings per share of 23 cents in the second quarter lagged the Zacks Consensus Estimates by a penny.
Alliant Energy Corporation (LNT) reported second-quarter 2013 operating earnings of 59 cents per share, up 7.3% from the Zacks Consensus Estimate of 55 cents
Our View
Not only did Dominion miss our earnings expectation in the reported quarter, the figure came in on the lower end of the guidance range of 60–70 cents. The results in the reported quarter were adversely impacted by lower-than-expected sales and lesser contributions from Producer Services.
Dominion continues to work on several growth projects and has plans to invest $3 billion each year over the 2013 to 2017 period. Moreover, Dominion is also working on its Cove Point liquefaction project. This project will facilitate import and export of LNG and put the company in an advantageous position, given the increasing usage of natural gas globally.
Based in Richmond, Va., Dominion Resources, Inc. was founded in 1909. With a market cap of $34.43 billion, the company employs 15,500 individuals. The company along with its subsidiaries engages in producing and transporting energy in the United States. Dominion currently retains a Zacks Rank #3 Rank (Hold).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment