Football and Film Quips Lighten Moods in Earnings Talks

Who says utility CEOs can’t loosen up, even during the stressful earning season?

Executives at some of the nation’s top utilities managed to sneak in a little sports talk and timely pop culture references while also seriously detailing net income, operating margins, capital budgets and all-around fiscal health. Ebit-dee, EBITDA, life goes on, bra!

No arcane Beatles puns were used in the making of these earnings calls–that we know of, anyway–but CEOs did crack wise about Back to the Future, Star Trek, the Detroit Tigers and Georgia Tech’s last-minute miracle to upset then-undefeated Florida State in college football.

AEP was one of the first utilities to release earnings in late October. CEO Nick Akins invoked a film classic while championing his company’s inroads on the environmental front.

“I’m reminded that yesterday October 21, 2015, was Back to the Future Day, the day that Marty McFly and Dr. Emmett Brown time-traveled into the future from the 1989 sequel to “Back to the Future,” Akins reminded normally sober-minded analysts. “When we look back at1989 and where we are today, during that time AEP has reduced SO2 emissions by over 80 percent, NOX emissions by over 80 percent, mercury emissions by over 54 percent, and CO2 emissions since 2005 levels of 15 percent.”

The Q&A jumped around to several other things, but one analyst–Anthony Crowdell of Jefferies & CO–drew laughter by saying he didn’t know AEP was so well-versed on Back to the Future.

“We all remember that,” Akins replied. “Some of us do, anyway. I’m probably talking to some people that don’t even remember.”

Crowdell quipped, “If you wanted to wear a Star Trek outfit at EEI, Nick, I’m okay with it.”

Akins was ready. “I happened to think about that when I was talking about the BOLD (transmission) line,” he said. “Boldly going where no man was gone before.”

A few days later, DTE Energy Chief Financial Officer Peter Oleksiak started his remarks by wondering what his Detroit Tigers were thinking earlier this year. The Tigers, of course, finished out of the American League baseball playoffs by a long shot.

“The Tigers looked toward the future at the July trade deadline this year and jettisoned their best pitcher, outfielder and closer,” Oleksiak replayed for analysts. “With that, they slipped firmly into last place by the end of the season. I guess all I can say is there is always next year, and our focus now is on the Red Wings making another playoff run.”

The DTE Energy CFO was clear that hockey was where that conversation was ending.

“I will not be mentioning the Lions or the Pistons on this call,” Oleksiak said before jumping into fiscal realities of the third quarter.

The fourth quarter also got some serious run, as in Georgia Tech’s last-minute block of a Florida State field goal attempt, which Lance Austin recovered and ran all the way back in a giant upset of the undefeated Seminoles.

Southern Co. CEO Tom Fanning is a Georgia Tech graduate. He was obviously happy when CRT Capital Group’s Jim von Riesemann asked him how the Yellow Jackets were doing.

“After last weekend they’re doing great,” Fanning pointed out in the Oct. 28 analyst call.

Michael Lapides, of Goldman Sachs, later said the ending reminded him of the 2013 Alabama-Auburn game in which the latter won after returning a missed last-second field goal.

“No,” the Georgia Tech-proud Fanning said. “It was way better than that one.”

Those executives generally had positive things to talk about earnings, too. In what was an up-and-down third quarter, Southern, AEP and DTE all reported earnings above the same period last year.

Southern tallied $959 million, or $1.05 per share, in 3Q earnings, compared with $718 million or 80 cents in the same three months of 2014. AEP reported $519 million or $1.06 per share, compared with $493 million or $1.01 in 3Q2014.

DTE generated $265 million in third-quarter earnings, parceled out to $1.47 per share, well above last year’s $156 million and 88 cents.

Entergy Corp. which announced the closing of two nuclear plants in the near future, reported a quarterly loss of $4.04 per share, due to the non-cash asset impairments of those two plants.

Eversource Energy hit $235.9 million in net income, at 74 cents per share about the same as last year. Dominion Resources posted $2.97 billion in third-quarter revenue but missed analysts’ expectations by reporting profit of only $1 per share.

Net income at Duke Energy was strong, but down from same time last year. The company’s third-quarter profits totaled $932 million, of $1.35 per share, down from $1.27 billion, or $1.80 per share, in 2014’s comparable period.

 

 

 

 

 

 

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