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Unitil Beats on Earnings, Misses Revs

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Unitil Corporation (UTL - Free Report) reported third-quarter 2013 earnings of 4 cents per share, surpassing the Zacks Consensus Estimate of a loss of a penny. Quarterly earnings jumped 33.3% year over year, on the heels of an improvement in both natural gas and electricity sales margins. The positives were partially offset by increased utility operating costs.

Operational Highlights

In the quarter under review, Unitil Corporation posted total operating revenues of $72.5 million, missing the Zacks Consensus Estimate by $0.5 million. Quarterly revenues climbed 1.7% year over year due to a 5.3% rise in the company’s Electric segment sales. This was partially offset by a 6.9% year-over-year drop in the company’s Gas segment revenues. Unitil Corporation’s Other segment reported flat revenues year over year.

Total operating expenses edged up 1.1% to $67 million from the year-ago figure of $66.3 million. A rise in expenses was primarily due to an increase in depreciation expenses, costs of purchased electricity and operation and maintenance expenses.

Despite the marginal rise in expenses, the company’s operating margin rose to 7.6% from 7% in the year-ago quarter on the back of higher revenues.

Total electricity sales volume edged down 0.7% year over year to 465.8 million kilowatt-hours due to a decline in residential consumption.

Total gas sales volume increased 2.5% to 24.4 million therm from 23.8 million therm a year ago. The improvement in sales was primarily driven by a rise in commercial/industrial gas sales and a rise in the customer count.

Financial Update

Unitil Corporation’s cash and cash equivalents as of Sep 30, 2013 were $12.3 million versus $9.5 million as of Sep 30, 2012.

Long-term debt (less current portion) as of Sep 30, 2013 was $286.9 million compared with $287.5 million as of Sep 30, 2012.

During the first nine months of 2013, cash provided by operating activities was $84.1 million versus $61.9 million in the year-ago comparable period.

The company invested $64.6 million, during the first nine months of 2013, under its capital spending program.

Dividend Update

During the earnings call, the board of directors of Unitil Corporation announced that the company will pay a regular quarterly dividend of 34.5 cents per share on the company’s common stock. On an annualized basis, the rate of dividend stands at $1.38 per share.

Peer Comparison

American Electric Power Company Inc. (AEP - Free Report) reported third-quarter operating earnings of $1.10 per share, beating the Zacks Consensus Estimate of $1.08 by 1.9%.

Zacks Rank

Unitil Corporation currently has a Zacks Rank #3 (Hold). However, other stocks from the industry that are presently performing well include NRG Yield, Inc. (NYLD - Free Report) and UNS Energy Corp. , each with a Zacks Rank #1 (Strong Buy).

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