Diversified energy company FirstEnergy Corp. (FE) reported Tuesday a profit for the first quarter that declined from last year, hurt by a revenue drop and higher depreciation expense. However, adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed its earnings guidance for the full-year 2013.
"Our first quarter results were solidly in line with our expectations. We continued to achieve growth in our competitive business as a result of the successful implementation of our retail strategy, and we executed several key elements of our financial plan, which is designed to improve the balance sheet, enhance liquidity, and maintain investment grade credit metrics," President and CEO Anthony Alexander said in a statement.
The Akron, Ohio-based electric utility reported net income of $196 million or $0.47 per share for the first quarter, lower than $306 million or $0.73 per share in the prior-year quarter.
Excluding items, normalized earnings for the quarter were $317 million or $0.76 per share, compared to $344 million or $0.82 per share in the year-ago quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.
The company noted that adjusted results benefited from lower operating costs, higher distribution deliveries, and a lower effective income tax rate, partially offset by lower commodity margins, higher depreciation expense and reduced revenues from the regulated transmission business.
Total revenues for the quarter declined to $3.73 billion from $4.0 billion in the same quarter last year, but topped three Wall Street analysts' consensus estimate of $3.66 billion.
Electric distribution deliveries for the first quarter grew 3 percent from last year, and increased earnings by $0.07 per share, due to cooler weather. Industrial deliveries edged up 0.4 percent, residential deliveries grew 6 percent, and commercial deliveries edged up 0.6 percent from last year.
Total expenses for the quarter declined to $3.08 billion from last year to $3.24 billion.
The company noted that its competitive subsidiary, FirstEnergy Solutions, continued to successfully expand its business and customer base through the implementation of its multi-channel sales strategy. These gains were offset by lower capacity prices, which drove an overall reduction in commodity margin.
Looking ahead to fiscal 2013, FirstEnergy reaffirmed its forecast for adjusted earnings in a range of $2.85 to $3.15 per share. Street is currently looking for full-year 2013 earnings of $2.99 per share.
"We remain focused on positioning our company for long-term growth, while addressing the impact of current market conditions and regulatory challenges," Alexander added.
FE closed Monday's regular trading session at $44.18, down $0.70 on a volume of 2.54 million shares.
For comments and feedback: editorial@rttnews.com