DTE Energy Company (DTE - Free Report) reported third-quarter 2016 operating earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.54 by 27.3%. Reported earnings were also up 40% from the year-ago figure of $1.40.
On a GAAP basis, earnings came in at $1.88 per share, compared with $1.47 reported in the prior-year quarter. The variance between GAAP and pro forma earnings was due to certain non-recurring items, mark-to-market adjustments and discontinued operations.
Total Revenue
Total revenue came in at $2,928 million, surpassing the Zacks Consensus Estimate of $2,658 million by 10.2%. Reported revenues were also up 12.7% from the year-ago figure of $2,598 million on account of higher contribution from both the utility and non-utility operations.
Operating Update
Operation and maintenance expenses in the reported quarter were $562 million, up 3.7% year over year.
Total operating expenses increased 12.2% to $2,421 million. This was primarily due to higher fuel, purchased power and gas expenses at utility (9.8%) and non-utility (18.9%), depreciation and amortization (17.3%).
Operating income increased 15.2% to $507 million.
Segmental Highlights
Utility Operations
DTE Electric: Segment operating earnings were $285 million, up 33.2% year over year.
DTE Gas: The segment reported operating loss of $4.0 million. In the year-ago period, it had posted a loss of $11 million.
Non-Utility Operations
Gas Storage and Pipelines: The segment generated profits of $28 million, up from $27 million a year ago.
Power and Industrial Projects: The segment posted operating profits of $35 million, up from $32 million in the prior-year quarter.
Corporate and Other: The segment reported operating earnings of $10 million, compared to the year-ago loss of $1.0 million.
Financial Update
Cash from operations in the first nine months of 2016 was $1.8 billion, with free cash flow of $0.3 billion.
The company utilized $0.4 billion to pay dividends and another $0.5 billion to redeem existing debts during the first nine months of the year.
Guidance
DTE Energy reiterated the recently updated operating earnings guidance for 2016 in the range of $5.09–$5.35 per share, compared to the prior expectations of $4.91–$5.19.
A Peer Release
Entergy Corporation (ETR - Free Report) reported third-quarter 2016 operational earnings of $2.31 per share, beating the Zacks Consensus Estimate of $1.95 by 18.5%. The reported number also improved 21.6% from $1.90 reported a year ago.
Upcoming Utility Releases
CMS Energy Corp. (CMS - Free Report) will report third-quarter results on Oct 27. The company has an Earnings ESP of +5.26% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Electric Power Co., Inc. (AEP - Free Report) will report third-quarter results on Nov 1. The company has an Earnings ESP of +1.68% and a Zacks Rank #3 (Hold).
Zacks Rank
DTE Energy currently has a Zacks Rank #2 (Buy).
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DTE Energy Company (DTE - Free Report) reported third-quarter 2016 operating earnings per share of $1.96, beating the Zacks Consensus Estimate of $1.54 by 27.3%. Reported earnings were also up 40% from the year-ago figure of $1.40.
On a GAAP basis, earnings came in at $1.88 per share, compared with $1.47 reported in the prior-year quarter. The variance between GAAP and pro forma earnings was due to certain non-recurring items, mark-to-market adjustments and discontinued operations.
Total Revenue
Total revenue came in at $2,928 million, surpassing the Zacks Consensus Estimate of $2,658 million by 10.2%. Reported revenues were also up 12.7% from the year-ago figure of $2,598 million on account of higher contribution from both the utility and non-utility operations.
Operating Update
Operation and maintenance expenses in the reported quarter were $562 million, up 3.7% year over year.
Total operating expenses increased 12.2% to $2,421 million. This was primarily due to higher fuel, purchased power and gas expenses at utility (9.8%) and non-utility (18.9%), depreciation and amortization (17.3%).
Operating income increased 15.2% to $507 million.
Segmental Highlights
Utility Operations
DTE Electric: Segment operating earnings were $285 million, up 33.2% year over year.
DTE Gas: The segment reported operating loss of $4.0 million. In the year-ago period, it had posted a loss of $11 million.
Non-Utility Operations
Gas Storage and Pipelines: The segment generated profits of $28 million, up from $27 million a year ago.
Power and Industrial Projects: The segment posted operating profits of $35 million, up from $32 million in the prior-year quarter.
Corporate and Other: The segment reported operating earnings of $10 million, compared to the year-ago loss of $1.0 million.
Financial Update
Cash from operations in the first nine months of 2016 was $1.8 billion, with free cash flow of $0.3 billion.
The company utilized $0.4 billion to pay dividends and another $0.5 billion to redeem existing debts during the first nine months of the year.
Guidance
DTE Energy reiterated the recently updated operating earnings guidance for 2016 in the range of $5.09–$5.35 per share, compared to the prior expectations of $4.91–$5.19.
A Peer Release
Entergy Corporation (ETR - Free Report) reported third-quarter 2016 operational earnings of $2.31 per share, beating the Zacks Consensus Estimate of $1.95 by 18.5%. The reported number also improved 21.6% from $1.90 reported a year ago.
Upcoming Utility Releases
CMS Energy Corp. (CMS - Free Report) will report third-quarter results on Oct 27. The company has an Earnings ESP of +5.26% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Electric Power Co., Inc. (AEP - Free Report) will report third-quarter results on Nov 1. The company has an Earnings ESP of +1.68% and a Zacks Rank #3 (Hold).
Zacks Rank
DTE Energy currently has a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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