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Public Service Enterprise (PEG) Q3 Earnings Top, Revenues Miss

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Public Service Enterprise Group Inc. (PEG - Free Report) , or PSEG, reported third-quarter 2020 adjusted operating earnings of 96 cents per share, which exceeded the Zacks Consensus Estimate of 95 cents by 1.1%. However, the bottom line dropped 2% on a year-over-year basis.

Excluding one-time adjustments, the company reported quarterly earnings of $1.14 per share compared with 79 cents in third-quarter 2019.

The year-over-year upside can be attributed to higher revenues and operating income.

 

Total Revenues

Revenues of $2,370 million in the quarter missed the Zacks Consensus Estimate of $2,523 million by 6.1%. However, the figure rose 3% from the year-ago quarter’s $2,302 million.

In the quarter, electric sales volumes were 12,176 million kilowatt-hours, while gas sales volumes were 504 million therms.

Under Electric sales, Residential sales volumes were 5,014 million kilowatt-hours whereas Commercial and Industrial sales volumes accounted for 7,088 million kilowatt-hours. Other sales accounted for 74 million kilowatt-hours.

Total gas sales volumes witnessed a 7% decrease in firm sales volumes and a 23% decline in non-firm sales volumes of gas.

Highlights of the Release

During the third quarter of 2020, the company reported operating income of $633 million, up from $490 million in the year-ago quarter. Total operating expenses were $1,737 million, down 4.1% from the year-ago quarter.

Interest expenses in the reported quarter were $149 million compared with $147 million in the year-ago quarter.

Segment Performance

PSE&G: Segment earnings were $313 million, down from $344 million in the prior-year quarter. PSE&G’s results in the quarter were adversely impacted by unfavorable operating and Maintenance (O&M) expense on account of more gas work internal labor costs from Tropical Storm Isaias.

PSEG Power: The segment’s adjusted earnings were $167 million compared with $145 million reported in the year-ago quarter.

PSEG Enterprise/Other: The segment’s earnings were $8 million compared with $6 million in the third quarter of 2019.

Financial Update

Long-term debt as of Sep 30, 2020 was $16,885 million, up from the 2019-end level of $15,108 million.

PSEG generated $2,517 million in cash from operations at the end of third-quarter 2020 compared with $2,709 million generated at the end of third-quarter 2019.

2020 Guidance

The company has narrowed its 2020 earnings guidance. Adjusted earnings are now projected in the range of $3.35-$3.50 compared with the prior guided range of $3.30-$3.50 per share. The Zacks Consensus Estimate for earnings is currently pegged at $3.39 per share, lower than the midpoint of the guided range.

PSE&G’s operating earnings are now anticipated to be $1,325-$1, 355 million compared with the prior guided range of $1,310-$1,370 million. The company currently expects PSEG Power operating earnings to be in the range of $385-$430 million compared with the earlier guided range of $345-$435 million.

Zacks Rank

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

Recent Utility Releases

Entergy (ETR - Free Report) reported third-quarter 2020 adjusted earnings of $2.44 per share, which surpassed the Zacks Consensus Estimate of $2.42 by 0.8%.

American Electric Power (AEP - Free Report) reported third-quarter 2020 adjusted earnings per share of $1.47, which beat the Zacks Consensus Estimate of $1.46 by 0.7%.

NextEra Energy (NEE - Free Report) reported third-quarter 2020 adjusted earnings of $2.66 per share, which beat the Zacks Consensus Estimate of $2.65 by 0.4%.

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