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FirstEnergy (FE) Beats Q3 Earnings Estimates, Raises View

WEC XEL NEE FE

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Diversified energy company FirstEnergy Corporation (FE - Free Report) announced third-quarter 2016 operating earnings of 90 cents per share, higher than the Zacks Consensus Estimate of 76 cents by 18.4%.Quarterly earnings, however,fell 8.2% yearoveryear.

Meanwhile, on a GAAP basis, FirstEnergy reported earnings of 89 cents per share, compared to the prior-year earnings of 94 cents.

The variance between GAAP and operating earnings figure was due to regulatory charges of 2 cents, merger accounting related costs of a penny and mark-to-market adjustments gain of 2 cents.

Total Revenue

FirstEnergy generated total revenue of $3,917 million, beating the Zacks Consensus Estimate of $3,828 million by 2.3%. However, reported revenues were down 5% from $4,123 million reported a year ago.

The top line declined due to lower revenues from Competitive Energy Services.

Highlights of the Release

Total electric sales increased by 2,675 thousand megawatt-hours (MWh), or 6.9% year over year. Residential sales were up by 1,833 thousand MWh (12.8%), while commercial sales grew by 542 thousand MWh (4.7%). The increase was attributable to the impact of above-average temperatures in the company’s service territories. Industrial sales improved by 302 thousand MWh (2.4%) primarily on account of higher usage in the shale, gas and coal sectors.

For the third quarter, FirstEnergy incurred operating expenses of $3,056 million, down 5% from $3,215 million a year ago primarily due to lower fuel and purchased power.

Operating income in the reported quarter stood at $861 million, down 5.2% from $908 million in the prior-year quarter.

FIRSTENERGY CP Price, Consensus and EPS Surprise

 

FIRSTENERGY CP Price, Consensus and EPS Surprise | FIRSTENERGY CP Quote

Financial Update

FirstEnergy's cash on hand as of Sep 30, 2016 was $551 million, up from $131 million as of Dec 31, 2015.

Cash from operating activities in the third quarter was $1,120 million, compared with $1,327 million a year ago.

Long-term debt and other long-term obligations as of Sep 30, 2016 were $18,532 million, compared with $19,099 million as of Dec 31, 2015.

Guidance

FirstEnergy has raised its operating earnings guidance for 2016 to the range of $2.60-$2.70from its previous expectations of $2.40–$2.60.

Other Utility Releases

NextEra Energy, Inc. (NEE - Free Report) announced third-quarter 2016 adjusted earnings of $1.74 per share, outpacing the Zacks Consensus Estimate of $1.65 by 5.5%.

WEC Energy Group (WEC - Free Report) reported third-quarter 2016 adjusted earnings of 69 cents per share, beating the Zacks Consensus Estimate of 60 cents by 15%.

Xcel Energy Inc. (XEL - Free Report) recorded third-quarter operating earnings of 90 cents per share, outpacing the Zacks Consensus Estimate of 87 cents by 3.5%.

Zacks Rank

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

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