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ALLETE (ALE) Tops Q3 Earnings Estimates, 2016 View Intact

CMS ETR DTE ALE

Trades from $3

ALLETE, Inc. (ALE - Free Report) reported third-quarter 2016 adjusted earnings of 99 cents per share, surpassing the Zacks Consensus Estimate of 96 cents by 15.6%. On a year-over-year basis, however, quarterly earnings tumbled 34.1%.

Third-quarter results reflect the impact of higher cost recovery revenues and production tax credits, partially offset by higher depreciation expense.

Total Revenue

In the third quarter of 2016, ALLETE total revenues of $349.6 million lagged the Zacks Consensus Estimate of $442 million by 20.9%.Further, revenues were down from $462.5 million reported in the prior-year quarter.

The revenue decline hit the company’s share price, with the stock slipping 0.7% on Friday to $58.96 at the close of the trading session.

Highlights of the Release

ALLETE’s total electricity sales volume increased 5% year over year to 3,612 kilowatt-hours.

The company’s total operating expenses were $296.2 million, down 21.5% year over year due to lower cost of sales.

Operating income in the reported quarter was down 37.3% year over year to $53.4 million.

In the quarter under review, interest expenses increased 5.6% year over year to $18.7 million.

ALLETE INC Price, Consensus and EPS Surprise

 

Financial Update

ALLETE’s cash and cash equivalents, as of Sep 30, 2016 were $107.2 million, up from $97 million as of Dec 31, 2015.

Long-term debt as of Sep 30, 2016 was $1,358.9 million, lower than $1,556.7 million at 2015 end.

2016 Guidance

ALLETE has maintained its 2016 earnings at the low end of the range of $3.10 to $3.40 per share.

The guidance excludes an adverse impact of $8.8 million, or 18 cents per share, related to the regulatory outcome of the Oct 18, 2016, Minnesota Public Utilities Commission (MPUC) hearing on the allocation of North Dakota tax credits.

Peer Releases

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%.

Entergy Corporation (ETR - Free Report) reported third-quarter 2016 operating earnings of $2.31 per share, beating the Zacks Consensus Estimate of $1.95 by 18.5%.

CMS Energy Corporation (CMS - Free Report) reported third-quarter 2016 adjusted earnings per share of 70 cents, beating the Zacks Consensus Estimate of 60 cents by 16.7%.

Zacks Rank

ALLETE, Inc.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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