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Public Service Enterprise (PEG) Q2 Earnings Beat, Rise Y/Y

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Public Service Enterprise Group Inc. (PEG - Free Report) or PSEG reported second-quarter 2018 adjusted operating earnings of 64 cents per share, which exceeded the Zacks Consensus Estimate of 62 cents by 3.2%. Earnings
also improved 3.2% on a year-over-year basis.

Excluding one-time adjustments, the company reported GAAP earnings of 53 cents per share compared with 22 cents in second-quarter 2017.

Total Revenues

Revenues of $2,016 million in the quarter missed the Zacks Consensus Estimate of $2,370 million by 14.9%. Moreover, revenues decreased 5.9% from the year-ago figure of $2,142 million.

During the reported quarter, electric sales volume increased 2.1% to 9,783 million kilowatt-hours but gas sales volume marginally declined 0.2% to 690 million therms.

For electric sales, results reflected a 2% rise in the commercial and industrial sector, 2.2% rise in residential sector and a 4% improvement in street lighting. However, sales dropped 1.8% in interdepartmental sector.

Total gas sales volume in the reported quarter declined 23.7% in non-firm sales volume of gas and rose 24.8% in firm sales volume of gas.

Highlights of the Release

During the second quarter, the company has an operating income of $411 million compared to that of $195 million in the year-ago quarter. Total operating expenses were $1,605 million, down 17.6% from the year-ago quarter figure.

Interest expenses in the reported quarter were $111 million, up from $91 million posted in the year-ago quarter.

Public Service Enterprise Group Incorporated Price, Consensus and EPS Surprise

Public Service Enterprise Group Incorporated Price, Consensus and EPS Surprise | Public Service Enterprise Group Incorporated Quote

Segment Performance

PSE&G: Segment earnings were $231 million, up from $208 million in the prior-year quarter. Quarterly results reflect continued successful execution of its infrastructure investment programs and ongoing control of operating expenses.

PSEG Power: The segment’s earnings were $41 million against a loss of $97 million a year ago. Lower depreciation from cost savings associated with the early retirement of Hudson and Mercer generating stations, along with lower interest, helped in improving the segment’s income. Also a reduction in the corporate tax rate from the Tax Cut and Jobs Act, and other tax items improved income for this segment.

PSEG Enterprise/Other: The segment incurred net loss of $3 million compared to a net loss of $2 million in the second quarter of 2017.

Financial Update

Long-term debt as of Jun 30, 2018, was $14,060 million, up from the 2017-end level of $13,068 million.

Public Service Enterprise Group generated $1,633 million in cash from operations in the first half of the year, down from the year-ago figure of $1,755 million.

2018 Guidance

The company reiterated its 2018 guidance. Adjusted earnings are still projected in the range of $3.00-$3.20 per share.

PSE&G’s operating earnings are still anticipated in the range of $1,000-$1,030 million. The company continues to expect PSEG Power operating earnings guidance in $485-$560 million band.

Additionally, PSEG Enterprise/Other’s operating earnings expectations are still projected at $35 million.

Zacks Rank

Public Service Enterprise 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

Xcel Energy (XEL - Free Report) recorded second-quarter 2018 operating earnings of 52 cents per share, beating the Zacks Consensus Estimate of 47 cents by 10.6%. Also, the bottom line was 15.6% higher than the year-ago quarter’s tally.

DTE Energy (DTE - Free Report) reported second-quarter 2018 operating earnings per share of $1.36, which outpaced the Zacks Consensus Estimate of $1.11 by 22.5%.

American Electric Power (AEP - Free Report) reported second-quarter 2018 adjusted earnings per share (EPS) of $1.01, beating the Zacks Consensus Estimate of 88 cents by 14.8%.

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