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OGE Energy (OGE) Q2 Earnings Miss Estimates, Sales Up Y/Y

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OGE Energy Corp.’s (OGE - Free Report) second-quarter 2018 earnings of 55 cents per share missed the Zacks Consensus Estimate of 57 cents by 3.5%. However, the reported figure improved 5.8% from 52 cents registered in the year-ago quarter. Higher gross margin buoyed by warmer-than-normal weather drove the company’s bottom-line performance.

Revenues

OGE Energy’s operating revenues of $567 million declined 3.3% from the prior-year quarter’s figure of $586.4 million. The downside can be attributed to year-over-year lower industrial, oilfield and transmission revenues.

OGE Energy Corporation Price, Consensus and EPS Surprise

OGE Energy Corporation Price, Consensus and EPS Surprise | OGE Energy Corporation Quote

Operational Highlights

Total sales in the reported quarter amounted to 7.4 million megawatt-hours (MWh),up from 7.1 million MWh in the prior-year quarter. The upside was driven by higher system sales, which increased 7.6% year over year. Meanwhile, the company’s customer count inched up by 0.8% to 845,244.

Cost of sales summed $208.7 million compared with $232.1 million in the prior-year quarter.

Total operating expenses rose 8.7% year over year to $226.6 million on account of higher operation and maintenance expenses, depreciation and amortization expenses as well as higher taxes (other than income). Operating income decreased 9.7% to $131.7 million from the year-ago quarter’s figure of $145.8 million.

Interest expenses totaled $40.9 million in the second quarter, up from $37.1 million in the comparable quarter last year.

Other Highlights of the Release

OGE Energy reported net income of $111 million in the second quarter, up from the prior-year quarter’s figure of $105 million.

OG&E: The segment’s net income rose 7% year over year to $92 million in the reported quarter, courtesy of higher gross margin.

Natural Gas Midstream Operations: The segment posted net income of $23 million compared with $18 million in the year-ago quarter. The upside was driven by higher record volumes in the gathering and processing segments.

Guidance

For 2018, OGE Energy expects to generate consolidated earnings at the upper end of its earlier projected range of $1.90-$2.05 per share.

Zacks Rank

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

Other Utility Releases

FirstEnergy Corporation (FE - Free Report) reported second-quarter 2018 operating earnings of 62 cents per share, which exceeded the Zacks Consensus Estimate of 53 cents by 17%.

DTE Energy’s (DTE - Free Report) second-quarter 2018 operating earnings per share of $1.36 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, which surpassed the Zacks Consensus Estimate of 88 cents by 14.8%.

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