PPL Beats, Reaffirms Guidance

PPL Corp. (PPL - Snapshot Report) today reported third-quarter earnings from continuing operations of 52 cents per share, beating the Zacks Consensus Estimate of 44 cents and last year’s profit of 45 cents. The better-than-expected earnings during the quarter was due to benefits of the company’s cost control programs.
 
Earnings from PPL’s supply segment improved by 17 cents per share over the last year, driven by higher wholesale volumes in the West, higher capacity prices in the East and higher baseload generation. PPL’s Pennsylvania delivery business segment posted an earnings decline of 2 cents per share, primarily driven by lower delivery revenues, resulting from the impacts of weather and the economy, and higher financing costs. PPL’s international delivery business segment also reported an earnings decline of 8 cents per share, due to higher U.K. and U.S. income taxes, less favorable currency exchange rates and lower financing costs.
 
Net revenues in the quarter decreased 39% to $1,805 million compared to $2,971 million in the year-ago period.
 
Despite ongoing pressure on wholesale energy prices and customer demand due to the continuing weak economy and mild weather, PPL reaffirmed its 2009 earnings guidance of $1.60 to $1.90 per share, compared to $2.02 earned in 2008. PPL also maintained its 2010 earnings forecast of $3.10 to $3.50 per share.
 
PPL remains positive on its hedge programs executed for 2010 and expects them to provide greater earnings and cash flow predictability. PPL has hedged nearly 100% of its expected baseload generation output for 2010 and forecasts strong growth in 2010 energy margins based on hedged power and fuel prices, as well as hedged capacity prices in the PJM Interconnection.