Integrys Energy Group, Inc. (TEG) reported fourth-quarter 2014 pro forma earnings of 82 cents per share, surpassing the Zacks Consensus Estimate of 77 cents by 6.5%. Earnings however declined 9.9% from the year-ago quarter.
The year-over-year decline can be attributed to lower earnings generated from the natural gas utility business and electric transmission investment.
Fourth-quarter GAAP earnings of 42 cents per share slumped from $1.63 per share in the fourth quarter of 2013. The difference between GAAP and pro forma earnings was due to a 1 cent gain on abandonment of Power Development's Winnebago Energy Center, a 3 cent gain on sale of lodge and related property in Wisconsin, 24 cents of loss from discontinued operations, a one-time loss of 18 cents from sale of Integrys Energy Services' retail energy business and, finally, a merger cost of 2 cents.
2014 earnings came in at $2.99 per share, trailing the Zacks Consensus Estimate of $3.22 cents by 7.1%. Earnings per share for the year also declined 9.4% from $3.30 per share in 2013.
Revenue Update
Integrys Energy's total revenues of $1,012.3 million for the fourth quarter trumped the Zacks Consensus Estimate of $615 million by 64.6%. The top line however dipped 0.6% from $1018.8 million reported last year.
Revenues for 2014 came in at $4,144.2 million, escalating 18.9% from $3,485.5 million in 2013.
Quarterly Operating Results
Total electric sales from the regulated segment declined 11.6% year over year to 3,468.8 million kilowatt-hours (Kwh). Integrys witnessed a year-over-year decline in electric sales in the fourth quarter primarily due to a reduction in heating degree days at all its subsidiaries. The regulated throughput gas volume was 1,286.0 million therms, down 2.1% year over year.
Total expenses increased a marginal 0.6% year over year to $894.3 million.
Interest expenses in the reported quarter were $39.5 million, up 7 % year over year.
Financial Screening
Cash from operating activities for 2014 was $601.4 million compared with $554.9 million in 2013.
Cash and cash equivalents as of Dec 31, 2014, were $18.0 million compared with $16.8 million as of Dec 31, 2013.
Long-term debt as of Dec 31, 2014, was nearly $2,956.3 million, almost flat with $2,956.2 million as of Dec 31, 2013
Peer Releases
TECO Energy Inc. (TE) announced fourth-quarter 2014 operating earnings of 19 cents per share, missing the Zacks Consensus Estimate of 21 cents by 9.5%.
CMS Energy Corp. (CMS) reported fourth-quarter 2014 earnings per share of 35 cents on an adjusted basis. Quarterly earnings lagged the Zacks Consensus Estimate by a penny.
Integrys Wisconsin Deal
Integrys Energy’s quarterly earnings surpassed the Zacks Consensus Estimate in the fourth quarter primarily due to the elimination of loss from discontinued operations of the retail energy business of Integrys Energy Services, Inc.
Integrys Energy Group has lately been divesting its non-core assets. Moreover, the company is slated to be acquired by Wisconsin Energy Corporation (WEC) in a cash and stock deal valued at $9.1 billion. The enlarged company will bring synergies through economies of scale.
Integrys Energy’s efforts to develop compressed natural gas stations across the country are also appreciable.
Integrys Energy currently carries a Zacks Rank #4 (Sell).
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