Earnings run the Gamut for Utilities Last Year

The final quarter of 2016 was not stellar for all utility companies. A sampling of recent earnings releases shows some, like NextEra and DTE Energy, generated strong profits last year, while others, like Entergy and Duke, sustained losses on writedowns due to discontinued operations.

We’re including a day-by-day breakdown of the earnings results for some of the nation’s biggest power providers.

Jan: 26: AEP Reports Lower Operating Earnings Due to Tax Audit Settlement

American Electric Power report fourth-quarter earnings of $373 million, or 76 cents per share, and full-year earnings of $611 million for 2016. The Columbus, Ohio-based utility’s full-year earnings were down nearly 70 percent due to a federal tax audit statement, final accounting for the sale of AEP’s commercial barge operations and mark-to-market impact of commodity hedging activities.

Operating earnings, not accounting for the writedowns, totaled $1.9 billion, a $100 million increase over raw earnings in 2015.

AEP CEO and President Nick Akins credited the transmission business for much of that gain. It contributed 54 cents per share to earnings for the year, a 38 percent increase over 2015.

Jan. 27: NEE Nearly Doubles Net Income in 2016

NextEra Energy Inc. reported full-year profits of $966 million (or $2.06 per share) for 2016, compared with $507 million ($1.10) in the previous year. The Juno Beach, Fla.-based utility grew adjusted earnings per share by 8.4 percent.

The company’s cornerstone regulated utility, Florida Power & Light Co., contributed net income of $371 million, a slight increase over 2015.

“NextEra Energy Resources also had a very successful year, expanding its renewables portfolio through the addition of approximately 2,500 megawatts of new wind and solar projects,” NEE CEO Jim Robo said in the statement. “This was not only a record year for the business, but we also believe was the most wind and solar megawatts ever added in North America in one year by one company.”

NextEra also had a huge year on the M&A front, acquiring Texas-based Oncor Electric Delivery from bankrupt Energy Future Holdings for nearly $19 billion in the summer of 2016.

Feb. 1: Dominion Raises Earnings 10 Percent over Previous Year

Dominion Resources revealed operating earnings for 2016 at $2.3 billion ($3.80 per share), compared to $2 billion ($3.44) in 2015. Fourth-quarter reported earnings totaled $457 million, although operating earnings hit $618 million, both increases over same time in the previous year.

The Richmond, Va.-based utility said the difference in reported and operating earnings was due to charges from future ash pond and landfill closures, costs associated with the Questar merger, among other things.

Feb. 9: DTE Energy Raises Earnings Nearly 20 Percent

DTE Energy reported $868 million, or $4.83 per share, in 2016 earnings, compared with $727 million and $4.05, respectively, in the previous year. The Detroit-based utility said those higher earnings were primarily driven by a long, hot summer in the region.

“2016 was a great year for DTE.  We had solid financial performance and made significant progress on many other fronts.  Legislation was passed that secures Michigan’s energy future, we had the safest year in our more than 150-year history, and we added a major new acquisition to our Gas Storage & Pipelines business.  These events are significant for our company, our customers and our state’s future,” said Gerry Anderson, DTE Energy chairman and CEO, in a statement.

DTE exceeded its commitment to the Pure Michigan Business Connect local supplier initiative, having spent more than $1.3 billion with Michigan-based companies in 2016. The company’s six-year effort has led to increased spending with Michigan suppliers from $475 million in 2010 to $1.3 billion in 2016, creating and supporting an additional 13,000 new jobs for Michigan workers.

Feb. 15: Writedowns tag Entergy with Loss despite Higher Earnings

The New Orleans-based utility reporting a fourth-quarter loss of $9.88 per share on an as-reported basis, 31 cents per share  on an operational basis. For all of 2016, Entergy lost $3.26 per share as reported but operational earnings of $7.11 per share.

The losses are a result of asset impairments of the EWC (Entergy Whole Commodities) business.

CEO Leo Denault called last a year a pivotal one for the company.

“We completed our plan to exit the merchant power business and transition to a pure-play utility,” he said in the earnings release. “While previously disclosed charges at our EWC business led to an as-reported loss, adjusted earnings at our core Utility, Parent and Other (UP&O) business increased by more than 40 percent in 2016.”

Asset write-offs totaled more than $3 billion for the year, while operating cashflow also hit $3 billion. UP&O as-reported earnings, however, exceeded $911 million, more than 2 percent above the previous year.

Feb. 16: Duke Energy Sustains Quarterly Loss, but nets $2.15B Full-Year Profit

Duke Energy Corp. reported a fourth-quarter loss of $230.7 million, after reporting a profit in the same period a year earlier.

On a per-share basis, the Charlotte, North Carolina-based company said it had a loss of 33 cents. Earnings, adjusted to account for discontinued operations and non-recurring costs, were 81 cents per share.

The results met Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was also for earnings of 81 cents per share.

The electric utility posted revenue of $5.62 billion in the period.

For the year, the company reported profit of $2.15 billion, or $3.11 per share. Revenue was reported as $22.74 billion.

Duke Energy expects full-year earnings in the range of $4.50 to $4.70 per share.

Duke Energy shares have dropped 1 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased nearly 5 percent. The stock has risen nearly 1 percent in the last 12 months.

 

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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