ALLETE (ALE) Tops Q3 Earnings, Revenues; Guidance Up

Zacks

ALLETE, Inc. ALE reported third-quarter 2015 earnings of $1.23 per share, surpassing the Zacks Consensus Estimate of $1.00 by 23%. On a year-over-year basis, earnings improved 26.8%.

Total Revenues

In the third quarter, ALLETE posted total revenues of $462.5 million, surpassing the Zacks Consensus Estimate of $354.0 million by 30.6% and the year-ago revenue substantially by 62.3%.

Quarterly Operational Highlights

ALLETE’s total electricity sales volume decreased 1% year over year to 3,470 kilowatt-hours.

The company’s total operating expenses were $377.3 million, up 65.4% year over year due to higher operating and maintenance expenses and cost of sales.

Operating income in the reported quarter was up 40.1% year over year to $85.2 million.

In the quarter under review, interest expenses surged 34.1% year over year to $17.7 million.

Financial Update

ALLETE’s cash and cash equivalents as of Sep 30, 2015, were $103.0 million compared with $145.8 million as of Dec 31, 2014.

Long-term debt as of Sep 30, 2015, was $1,549.0 million, 22% higher than $1,272.8 million at 2014 end.

In the first nine months of 2015, the company’s cash from operating activities was $182.3 million compared with $126.1 million in the year-ago quarter.

Guidance

For 2015, ALLETE raised its earnings per guidance to the range of $3.35 to $3.50 from 3.20 to $3.40 per share earlier.

The upward revision in the 2015 earnings guidance was primarily due to strong project management performance in ALLETE Clean Energy’s development of a wind facility for customers and its success in reducing expenses through an active cost reduction program.

Other Utility Releases

DTE Energy Co. DTE reported third-quarter 2015 operating earnings per share of $1.40, surpassing the Zacks Consensus Estimate of $1.22 by 14.8%

PG&E Corp.’s PCG adjusted operating earnings per share of 84 cents in the third quarter of 2015 missed the Zacks Consensus Estimate of 92 cents by 8.7%.

American Electric Power Co., Inc. AEP reported third-quarter 2015 operating earnings of $1.06 per share, beating the Zacks Consensus Estimate of $1.00 by 6%.

Zacks Rank

ALLETE currently holds a Zacks Rank #3 (Hold).

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