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CenterPoint Energy Inc.’s (CNP - Analyst Report), fourth-quarter 2012 adjusted earnings of 28 cents per share surpassed the Zacks Consensus Estimate of 20 cents per share as well as the prior-year figure of 27 cents per share.

Including mark-to-market gains from marketable securities of 2 cents and indexed debt securities of 1 cent, net income came at 31 cents versus 27 cents in the year-ago quarter.

For full-year 2012, CenterPoint Energy delivered adjusted earnings of $1.25 per share, which breezed past the Zacks Consensus Estimate of $1.20 but fell below $1.27 earned in 2011.

Including step acquisition gain of 21 cents, goodwill impairment charge of 59 cents, mark-to-market losses -- natural gas derivative contracts of 2 cents, mark-to-market gains from marketable securities of 23 cents and mark-to-market losses from indexed debt securities of 11 cents -- the company reported net income of 97 cents in 2012, down from $1.37 earned in 2011.

Revenue

CenterPoint Energy’s total revenue fell 0.3% year over year to $2.14 billion in the quarter. The downside was due to a decrease in contribution from natural gas distribution as well as competitive natural gas sales and services. It also lagged the Zacks Consensus Estimate of $2.4 billion.

Full-year revenue declined 11.8% year over year to $7.5 billion. It was also below of the Zacks Consensus Estimate of $7.9 billion.

Quarterly Operational Performance

Total Expense decreased 2.3% year over year to $1.8 billion.

The magnitude in decrease in expense was more than the decline in revenue, inducing year-over-year operating income improvement of 13.1%.

Quarterly Segment Results

Electric Transmission & Distribution

During the quarter, the segment generated operating income of $99 million, up 6.5% year over year. The operating income includes $64 million from the regulated electric transmission & distribution utility operations (“TDU”) and $35 million from securitization bonds.

Operating income at TDU was up 3.2% year over year, driven by solid customer growth and recognition of deferred equity returns associated with true-up proceeds. However, higher net transmission costs were partial offset.

Natural Gas Distribution

Segment operating income was $91 million up 24.6% year over year. The upside reflects normal winter weather, rate changes, customer growth and decline in operation and maintenance expenses.

Competitive Natural Gas Sales and Services

Segment operating income of $12 million increased fourfold year over year. The improvement was driven by the termination of uneconomic transportation contracts and higher retail sales customers and volume.

Interstate Pipelines

The segment generated operating income of $47 million, down 9.6% from the prior-year quarter. The downside was due to contract expirations, decline in commodity prices, and lower system transportation revenue.

Field Services

The Field Services segment reported an operating income of $61 million in the quarter, up 15.1% year over year. The upside reflects timing of revenue recognition from contracts with throughput commitments, higher gathering services and retained gas volumes, and added income from acquisitions.

Other Operations

The segment broke even in the fourth quarter.

Financial Condition

CenterPoint Energy exited 2012 with cash and cash equivalents of $646 million, much higher than $220 million at 2011 end.

Long-term debt declined 3.3% over 2011 end to $8.4 billion at 2012 end.

Cash from operations declined 1.5% year over year to $1.86 billion in 2012.

Capital expenditure inched down 0.3% year over year to $1.2 billion in 2012.

Guidance

The company expects to generate earnings between $1.22 to $1.30 per share in 2013.

Dividend Update

The Board approved a quarterly dividend of 20.75 cents per share payable on Mar 8, 2013, to shareholders of record on close of Feb 15, 2013.

Performance of Few Other Eclectic Power Utilities

The AES Corporation (AES - Analyst Report) posted fourth-quarter 2012 earnings of 32 cents per share, 6.67% above the Zacks Consensus Estimate and 60% ahead of the year-ago earnings

CMS Energy Corporation (CMS - Analyst Report) announced earnings for the fourth quarter 2012 of 25 cents per share, beating the Zacks Consensus Estimate of 24 cents. The results were also above the year-ago earnings of 15 cents per share.

DTE Energy Company (DTE - Analyst Report) reported fourth-quarter operating earnings of 85 cents per share, in line with the Zacks Consensus Estimate. However, earnings were below the year-ago figure of 89 cents per share.

Zacks Rank

CenterPoint Energy carries a Zacks Rank #3 (Hold).

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