DTE Energy Company (DTE) reported third quarter 2013 earnings per share of $1.13, missing the Zacks Consensus Estimate by 8.8%. The bottom line also declined 13% year over year from $1.30 per share.
The underperformance reflects unusually hot weather last year which was not seen this quarter and lower earnings from the Gas segment.
Operating Statistics
Total revenue at DTE Energy climbed 9% year over year to $2,387.0 million. The reported quarter's revenue, however, fell short of the Zacks Consensus Estimate of $2,410.0 million.
Fuel, purchased power and gas expenses increased 27% year over year to $967.0 million. Operation and maintenance expenses moved up 6% year over year to $728.0 million.
Total operating expenses escalated 15.4% year over year to $2,058.0 million. Despite the higher top-line, spiraling expenses dented the operating income of the company by 19.0% year over year to settle at $329.0 million.
Segment Highlights
DTE Electric: Segment earnings were $179.0 million or $1.02 per share, down from $194.0 million or $1.13 per share in the prior-year quarter.
DTE Gas: Segment loss was $13.0 million or 7 cents per share compared with a profit of $4.0 million or 2 cents per share in the third quarter of 2012.
Non-Utility Operations
Gas Storage and Pipelines: The segment generated a profit of $16 million or 9 cents per share, up from $14 million or 8 cents per share in the year-ago quarter.
Power and Industrial Projects: The segment posted a profit of $27.0 million or approximately 15 cents per share, up from $22.0 million or 13 cents per share.
Energy Trading: The segment posted a loss of $6.0 million or 3 cents per share versus a profit of $1.0 million or 1 cent per share in the prior-year period.
Corporate and Other: Loss in the quarter was $5.0 million or 3 cents per share versus a loss of $9.0 million or 7 cents per share a year ago.
Financial Update
As of Sep 30, 2013, cash and cash equivalents were $71.0 million, up from $65 million as of Dec 31, 2012. At the end of third quarter 2013, long-term debt, net of current portion, was $6,846.0 million versus $7,014.0 million at year-end 2012.
Net operating cash flow in the first nine months of 2013 was $1,715.0 million versus $1,729.0 million in the first nine months of 2012.
Guidance
The company tightened its earnings per share guidance for 2013 to the range of $3.95 to $4.15 from the prior range of $3.90 to $4.20.
Other Upcoming Utility Releases
Integrys Energy Group, Inc. (TEG) is expected to release third quarter results on Nov 6, 2013. The Zacks Consensus Estimate for the quarter is 45 cents.
Calpine Corp.’s (CPN) earnings are scheduled to release on Nov 7, 2013. The Zacks Consensus Estimate for the quarter is 58 cents per share.
Alliant Energy Corp. (LNT) is expected to release its third quarter results on Nov 7, 2013. The Zacks Consensus Estimate for the quarter is $1.32 per share.
Our Take
DTE Energy failed to impress in the third quarter 2013 with both earnings and revenue trailing our estimates. The company’s cost-control efforts are yet to pay off as the quarter saw a substantial rise in operating expenses.
However, DTE Energy’s foray into wind energy generation is well-timed and will lend significant upside in the coming years owing to the Obama Climate Change program and an extension of the wind energy tariff. DTE Energy presently retains a Zacks Rank #3 (Hold).
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