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Analyst Blog

DTE Energy Company (DTE - Analyst Report) reported first quarter 2013 earnings per share of $1.34, easily beating the Zacks Consensus Estimate of $1.03. Results improved 47.3% year over year.

Earnings were driven by normal weather compared to a very mild winter in 2012, operating cost improvements at the utilities, and solid performance from the non-utility businesses.

Operating Statistics

Total revenue at DTE Energy was $2.5 billion, up 12.4% year over year. The reported quarter’s revenue also comfortably surpassed the Zacks Consensus Estimate of $2.3 billion.

Fuel, purchased power and gas expenses increased 15.2% year over year to $1 billion. Operation and maintenance expenses were up 1.9% year over year to $735 million.

The increase in expenses was offset by the revenue climb, thereby resulting in an operating income of $410 million, up 31.4% year over year.

Segment Update

DTE Electric: Segment earnings were $115 million or 66 cents per share, up from $96 million or 56 cents in the prior-year quarter.

DTE Gas: Segment profit was $96 million or 55 cents per share, up from $52 million or 31 cents per share in first quarter 2012.

Non-Utility Operations

Gas Storage and Pipelines: The segment generated profit of $17 million or 10 cents per share, flat year over year.

Power and Industrial Projects: The segment posted a profit of $12 million or 7 cents per share, up from $8 million or 5 cents per share in the year-ago period.

Energy Trading: The segment posted a profit of $7 million or 4 cents per share versus a loss of $2 million or 1 cent per share in the prior-year period.

Corporate and Other: Loss in the quarter was $13 million or 8 cents per share versus a loss of 15 cents or 10 cents per share.

Financial Update

As of Mar 31, 2013, cash and cash equivalents were $218 million, up from $65 million as of Dec 31, 2012. At the end of first quarter 2013, long-term debt, net of current portion, was $7.2 billion versus $7 billion at year-end 2012.

During the quarter, net cash from operating activities was $597 million, down from $620 million in the first quarter of 2012.

Guidance

The company expects earnings per share for 2013 in the range of $3.85 to $4.15. DTE Energy expects cash from operations of $1.8 billion for 2013.

In the long term, the company expects earnings growth in the range of 5.0% to 6.0%.

Zacks Rank

DTE Energy presently retains a short-term Zacks Rank #4 (Sell). Stocks in the energy sector worth considering are ALLETE, Inc. (ALE - Snapshot Report), Calpine Corp. (CPN - Snapshot Report), Cleco Corporation (CNL - Snapshot Report), all with a Zacks Rank #2 (Buy).

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