IdaCorp, Inc. (IDA) reported fourth quarter 2013 earnings of 55 cents per share, outpacing the Zacks Consensus Estimate of 49 cents by 12.2% and increasing 52.8% from the comparable year-ago period.
2013 earnings were $3.64 per share, beating the Zacks Consensus Estimate by 4.3% and increasing 5.2% from 2012. Full-year rate adjustment from the Langley Gulch plant and change in accounting practice contributed to the growth in earnings.
Highlights of the Release
IdaCorp’s total operating revenue in 2013 was $1.2 billion, which exceeded the year-ago figure by 15.3%. The upswing can be attributed to higher sales led by favorable weather and customer growth.
Operating income for the year was $291.7 million as against $242.6 million in 2012.
Cash flow from operations for 2013 was reported at $305.5 million compared with $249.3 million in 2012.
Long-term debt for 2013 totaled $1.6 billion compared with $1.5 billion in 2012.
IdaCorp currently has a credit facility of $125.0 million while its primary subsidiary Idaho Power has a credit facility of $300.0 million for meeting liquidity and operating requirements arising in the short term.
The company has recently adopted a change in its accounting method for investments in qualified affordable housing projects. This change is effective retrospectively and has led to an increase of $4.3 million in IdaCorp’s net income for 2012 and $5.1 million for 2013.
2014 Guidance
IdaCorp’s 2014 earnings expectation is in the range of $3.40 to $3.55 per share. While the 2013 number at $3.64 was even higher than the high end of the guided range for 2014, the Zacks Consensus Estimate of $3.42 is on the lower end.
The company expects capital expenditure for 2014 in the range of $280.0–$295.0 million, higher than the $228.0 million reported in 2013.
Guidance for operating & maintenance expenses was provided in the range of $335.0–$345.0 million.
IdaCorp expects its total hydroelectric generation to be within 5–7 million megawatt-hours (MWh).
Our Take
Expectation of growth in gross area product in Idaho Power’s service area along with the company’s favorable expansion options in that area hints towards a growth in business activities going forward. In addition, IdaCorp’s increasing customer count and anticipated growth in residential loads could be a contributing factor.
Zacks Rank
IdaCorp currently has a Zacks Rank #3 (Hold). However, better-ranked stocks in the Electric Utilities industry that can be considered are Black Hills Corp. (BKH), DTE Energy Co. (DTE) and CMS Energy Corp. (CMS). All these stocks carry a Zacks Rank #2 (Buy).
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