DTE Energy Company (DTE) reported third quarter 2014 operating earnings per share of $1.02, missing the Zacks Consensus Estimate of $1.11 by 8.1%. The bottom line also lagged the year-ago figure of $1.13 by 9.7%.
On a GAAP basis, earnings were 88 cents per share compared with $1.13 per share in the prior-year quarter. The variance between GAAP and pro forma earnings was due to adjustments of certain non-recurring items in its Energy Trading operations.
Total Revenue
Total revenues of $2.59 billion surpassed the Zacks Consensus Estimate by 2.4%. Revenues also jumped 8.7% year over year.
Operating Update
Operation and maintenance expenses rose 18.1% year over year to $860.0 million.
Total operating expenses escalated 14.5% year over year to $2.35 billion. This was primarily due to higher Fuel, Purchased Power and Gas expenses (up 15.7%) and operation and maintenance expenses.
Operating income in the reported quarter fell 27.3% year over year to $239.0 million primary due to higher expenditure.
Segmental Highlights
DTE Electric: Segment earnings were $135.0 million or 76 cents per share, down from $179.0 million or $1.02 per share in the prior-year quarter.
DTE Gas: The segment incurred a loss of $16.0 million or 9 cents per share compared with a loss of $13.0 million or 7 cents per share in the third quarter of 2013.
Non-Utility Operations
Gas Storage and Pipelines: The segment generated a profit of $20.0 million or 11 cents per share, up from $16.0 million or 9 cents per share in the year-ago quarter.
Power and Industrial Projects: The segment posted a profit of $38.0 million or approximately 21 cents per share, up from $27.0 million or 15 cents per share a year ago.
Energy Trading: The segment reported a profit of $3.0 million or 2 cents per share as against a loss of $6.0 million or 3 cents per share in the prior-year period.
Corporate and Other: The segment recorded a gain of 1 cent per share as compared to a loss of 3 cents per share in the year-ago quarter.
Financial Update
Operating cash flow in the first nine months of 2014 was $1.7 billion compared with $1.2 billion in the first nine months of 2013.
During the aforesaid period the company utilized $0.3 billion to pay dividends and $0.8 billion to redeem existing debts.
Guidance
DTE Energy increased its earnings per share guidance for 2014 to the range of $4.28−$4.42 from $4.20−$4.40 earlier. The company maintained its earnings growth target of 5% to 6%.
Renewable Efforts
During the quarter, DTE Energy's Echo Wind Park began commercial operation. This wind park will take DTE Energy a step closer to meet its objective to generate 10% of electricity from renewable sources by 2015.
Upcoming Releases
Edison International (EIX) is slated to release its third-quarter 2014 earnings after the market close on Oct 28. The Zacks Consensus Estimate is $1.35.
Avista Corp. (AVA) is slated to release its third-quarter 2014 earnings before the market open on Nov 5. The Zacks Consensus Estimate is 23 cents.
Ameren Corp. (AEE) is slated to release its third-quarter 2014 earnings before the market open on Nov 6. The Zacks Consensus Estimate is $1.24.
Zacks Rank
DTE Energy currently holds a Zacks Rank #4 (Sell).
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