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Wisconsin Energy Corporation (WEC - Analyst Report) reported second-quarter 2013 pro forma earnings of 52 cents per share, beating the Zacks Consensus Estimate by 5 cents.  A penny year-over-year rise in earnings was primarily driven by positive impacts from the share repurchase program and higher demand for natural gas during a cooler-than-normal spring season.

Total Revenue

Wisconsin Energy reported total revenue of $1,012.3 million, beating the Zacks Consensus Estimate by $49.3 million and the year-ago level by 7.2%.

Operational Update

Total operating expenses increased 8.4% year over year to $782.8 million due to a rise in cost of goods sold, and higher fuel and purchased power costs, and depreciation expenses.

Increase in revenues was more than offset by higher total operating expenses. In the reported quarter, operating margin was 22.7% compared with 23.6% a year ago.

Financials

As of Jun 30, 2013, Wisconsin Energy's cash and cash equivalents were $21 million versus $35.6 million as of Dec 31, 2012.

Cash provided by operating activities during the first six months of 2013 was $681.5 million versus $608.7 million in the year-ago comparable period.

In the first half of 2013, Wisconsin Energy's capital expenditures were $307.3 million, down from $314 million incurred in the prior-year quarter.

Other Company Releases

Calpine Corporation (CPN - Snapshot Report) reported second quarter adjusted loss of 7 cents per share as against the Zacks Consensus Estimate of earnings of 8 cents.

ALLETE Inc. (ALE - Snapshot Report) is slated to release its second quarter earnings on Aug 1. The Zacks Consensus Estimate is 40 cents.

Brookfield Infrastructure Partners L.P. (BIP - Snapshot Report) is slated to release its second quarter earnings on Aug 6. The Zacks Consensus Estimate is 81 cents.

Our Take

Currently, Wisconsin Energy has a strong project pipeline, including a biomass fuel generating plant in Rothschild, a new powerhouse at the Twin Falls hydroelectric site, a fuel source conversion project at Valley Power Plant, and improvement of fuel flexibility at the Oak Creek expansion units. We believe these projects would add to the company’s profitability in the long run.

In addition, we believe increase in electricity and natural gas customer headcounts at regular intervals will act as catalysts for the company's future performance.

However, stringent utility regulations and volatile commodity pricing could weigh on Wisconsin Energy’s forthcoming results.

Milwaukee, Wis.-based Wisconsin Energy generates and distributes electricity in Southeastern, East Central, and Northern Wisconsin, as well as in the Upper Peninsula of Michigan. The company also distributes natural gas. Wisconsin Energy currently has a Zacks Rank #4 (Sell).

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