PPL Corp. (PPL) on Friday reported a 13 percent increase in profit for the fourth quarter on revenues that more than doubled, while earnings per share declined reflecting dilution from the issuance of common stock in April last year. However, both earnings per share and revenue beat analysts' estimates.
Looking ahead, PPL forecast a decline in earnings for fiscal year 2012 from the preceding year, citing an expected decline in energy margins in the company's competitive-market supply segment. The company also increased its quarterly dividend by 2.9 percent.
The Pennsylvania-based energy and utility holding company's fourth-quarter earnings grew to $401 million from $355 million in the year-ago period, while earnings per share declined to $0.69 from $0.73 last year, reflecting dilution from the common stock issuance in April 2011.
Earnings from ongoing operations increased to $405 million from $404 million, with earnings per share declined to $0.70 from $0.83 in the year-ago quarter. On average, 13 analysts polled by Thomson Reuters expected earnings of $0.62 per share. Analysts' estimates typically exclude one-time items.
Total operating revenues for the quarter more than doubled to $4.22 billion from $1.86 billion in the year-ago period and beat analysts' consensus estimate of $3.04 billion.
For fiscal year 2011, PPL's reported earnings were $1.44 billion or $2.61 per share, up from $938 million or $2.17 per share in the prior year.
Excluding special items, earnings from ongoing operations rose to $1.5 billion from $1.4 billion last year. Earnings per share declined to $2.72 from $3.13 per share in the prior year, reflecting dilution of $0.75 per share from the June 2010 and April 2011 issuances of common stock to fund the acquisitions of regulated utility operations in Kentucky and the UK.
Operating revenues for the year surged 50 percent to $12.74 billion from $8.52 billion last year.
Analysts expected earnings of $2.64 per share for the year on revenues of $11.37 billion.
Looking ahead to 2012, PPL forecast earnings in a range of $2.15 per share to $2.45 per share, with a midpoint of $2.30 per share. Analysts expect earnings of $2.41 per share.
William Spence, President of PPL said."The 2012 earnings forecast is significantly affected by the expected decline in margins in our competitive-market supply segment."
PPL noted that the outlook also reflects dilution of $0.13 per share associated with its April 2011 issuance of common stock to finance the Midlands businesses acquisition.
Further, PPL projected that nearly 70 percent of its 2012 earnings would come from its regulated businesses, up from the 58 percent contribution from regulated businesses in its 2011 earnings from ongoing operations.
In addition, PPL announced an increase in its quarterly dividend rate on common stock to $0.36 per share, or $1.44 per share on an annualized basis, from $1.40 per share. The increased dividend is payable April 2 to shareowners of record as of March 9.
In Friday's regular session, PPL is trading at $27.94, up $0.24 or 0.85 percent on a volume of 637,010 shares.
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