CMS Energy Corporation (CMS) reported third-quarter 2014 earnings per share of 37 cents on an adjusted basis. Quarterly earnings lagged the Zacks Consensus Estimate of 41 cents by 9.8% and the year-ago figure of 48 cents by 22.9%.
GAAP earnings came in at 34 cents per share versus 48 cents in the year ago quarter. The difference in the adjusted and GAAP earnings was due to restructuring costs of 3 cents per share.
Operational Performance
In the quarter under review, CMS Energy’s operating revenues were $1,430 million, missing the Zacks Consensus Estimate of $1,531 million by 6.6%. On a year-over-year basis, revenues dropped 1% from $1,445 million.
The company’s operating expenses in the reported quarter were $1,194 million, up 5.9% year over year.
Operating income slid 25.6% to $236 million from $317 million a year ago.
In the reported quarter, CMS Energy’s interest charges increased 2% year over year to $101 million.
Financial Condition
CMS Energy had cash and cash equivalents of $493 million as of Sep 30, 2014, up from $172 million as of Dec 31, 2013.
As of Sep 30, 2014, total debt, capital leases and financing obligations rose to $8.42 billion from $7.88 billion as of Dec 31, 2013.
During the first nine months of 2014, cash from operating activities was $962 million versus $1,118 million in the year-ago comparable period.
Guidance
Even though earnings and revenues dipped, CMS Energy maintained its adjusted earnings forecast for 2014 at $1.76–$1.78 per share. The company also re-affirmed its long-term adjusted earnings growth guidance of 5%–7%.
Other Upcoming Release
Consolidated Edison, Inc. (ED) is expected to release its third-quarter results on Nov 6, 2014. The Zacks Consensus Estimate for the quarter is $1.43 per share.
Duke Energy Corp. (DUK) is slated to report its third-quarter result on Nov 5, 2014. The Zacks Consensus Estimate for the quarter is $1.52 per share.
IdaCorp, Inc. (IDA) is expected to release its third-quarter results on Oct 30, 2014. The Zacks Consensus Estimate for the quarter is $1.57 per share.
Our Take
CMS Energy continues to invest in utility infrastructure as well as renewable ventures besides pursuing an inorganic growth strategy. The company is focused on creating value for its customers through cost-reduction strategies.
The company has received an approval from Federal Energy Regulatory Commission (FERC) to acquire a 540-megawatt (MW) clean-burning natural gas plant in Michigan. It is expected that the acquisition of this plant will be complete by 2015.
CMS Energy’s focus on renewable energy will help it to meet increasing power demand and provide reliable services to its customers, besides meeting the government’s environmental mandates.
CMS Energy currently has a Zacks Rank #3 (Hold).
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