Earnings Trend Upward for Utilities in 2017

For the most part, utilities and their publicly traded vendors generated solidly upbeat income in 2017 compared with the previous year.

Assorted fourth-quarter and full-year earnings reports mostly showed increased income for the past year. Various reasons, including the benefit of tax cuts, accounted for the mostly good news.

Duke Energy reported full-year earnings of $4.36 per diluted share, more than a dollar above the 2016 returns. The North Carolina-based utility company’s fourth-quarter earnings averaged $1 per share, compared with a 33-cent EPS loss in 2016’s last three months.

Duke’s electric utilities and infrastructure segment generated $826 million in the fourth quarter, $343 million better in year-over-year comparison. Those returns were positively impacted by a $231million benefit related to the corporate Tax Act cut.

Exelon Corp., the nation’s largest utility holding company in terms of customers, reported that full-year net income increased to $3.97 per share from $1.22 in 2016. Fourth-quarter net income rose more than eight-fold year over year.

The reduction in the corporate income tax rate resulted in Exelon Generation gaining a one-time credit of approximately $1.9 billion. Overall, Chicago-based Exelon earned $1.87 billion in net income for all of 2017, also eight-fold above the previous year.

Dominion Energy’s full-year earnings more than tripled in 2017, to $1.4 billion ($2.22 EPS) from $457 million (73 cents) in 2016. Operating earnings actually fell by about $33 million year over year, but was reported higher due to the impact of the tax cut, pushing the gain up $1 billion over the previous year.

The quarter and year weren’t as kind to every company. Pacific Gas & Electric’s parent company, PG&E Corp., reported nearly $1.65 billion in full-year net income—a $253 million jump above 2016—but fourth-quarter results were down more than 80 percent to $114 million, or 22 cents per share.

PG&E was impacted, both positively and negatively, by transition costs of the tax cuts but also costs related to the northern California wildfires.

St. Louis-based Ameren Corp. reported a fourth-quarter loss of $60 million on revenue of $1.4 billion. The 2017 full-year profit totaled $523 million or $2.14 per share.

Power management vendor Eaton Corp. reported net income that averaged out to $1.43 per share for the fourth quarter. Sales totaled $5.2 million for the same period, seven percent higher than the final quarter of 2016.

PPL Corp., which holds the utilities serving Pennsylvania and Kentucky, reported $1.13 billion in full-year earnings, or $1.64 per share, down from $1.9 billion and $2.79 for all of 2016.

The results reflected a $321 million loss due to impact of the new tax law enacted in December. Lower earnings also were negatively impacted by lower foreign currency exchange rates, lower sales volumes and higher deprecation, according to PPL’s earnings report.

PPL also will likely see 3 cents per share in lower earnings due to the full-year impact of tax reform. The company will issue about $1 billion in equity to offset effects on PPL’s credit ratings.

Consolidated Edison’s net income rose nearly $300 million year over year to more than $1.5 billion in 2017. Fourth-quarter profits more than doubled from $207 million to $505 million ($1.63 per share).

 

Author

  • 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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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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