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ALLETE's (ALE) Earnings & Revenues Miss Estimates in Q2

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ALLETE, Inc. (ALE - Free Report) delivered second-quarter 2020 adjusted earnings of 39 cents per share, which missed the Zacks Consensus Estimate of 65 cents by 40%. Also, the bottom line plunged 40.9% on a year-over-year basis.

This underperformance can be attributed to lower net income at Minnesota Power, primarily due to fall in demand from the commercial and industrial (C&I) customers, decline in sales to municipal customers and other power suppliers due to the expiration of related contracts.

Total Revenues

In the reported quarter, total revenues of $243.2 million lagged the Zacks Consensus Estimate of $296 million by 17.8%. Also, revenues dropped 16.3% from $290.4 million in the prior-year quarter.

Highlights of the Release

ALLETE’s total electricity sales volume was 2,604 million kilowatt-hours, down 18.8% from 3,206 million kilowatt-hours in the year-ago quarter. The residential load increased 6% year over year to 246 million kilowatt-hours in the second quarter. This was offset by a 28.6% fall in the C&I load.

The company’s total operating expenses in the second quarter totaled $230.5 million, down 9.3% year over year.

Operating income in the quarter under review decreased 64.9% to $12.7 million.

Interest expenses dipped 2.5% to $15.9 million.

Allete, Inc. Price, Consensus and EPS Surprise

Allete, Inc. Price, Consensus and EPS Surprise

Allete, Inc. price-consensus-eps-surprise-chart | Allete, Inc. Quote

Financial Update

ALLETE’s cash and cash equivalents as of Jun 30 were $25.7 million, down from $69.3 million as of Dec 31, 2019.

Long-term debt as of Jun 30 was $1,381 million, down from $1,400.9 million as of Dec 31, 2019.

Cash from operating activities for the six months ended June amounted to $144.5 million, up from $95.2 million in the prior-year’s comparable period.

Guidance

The company anticipates Non-GAAP earnings in the band $3.25-$3.45 for 2020. This guided range excludes the Minnesota Power rate case settlement charge, net of tax.

Zacks Rank

ALLETE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Other Utility Releases

FirstEnergy Corporation (FE - Free Report) delivered second-quarter 2020 operating earnings of 57 cents per share, which beat the Zacks Consensus Estimate of 55 cents by 3.64%.

NextEra Energy, Inc. (NEE - Free Report) reported second-quarter 2020 adjusted earnings of $2.61 per share, trumping the Zacks Consensus Estimate of $2.50 by 4.4%.

CMS Energy Corporation (CMS - Free Report) reported second-quarter 2020 adjusted earnings per share of 49 cents, which surpassed the Zacks Consensus Estimate of 45 cents by 8.9%.

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