CenterPoint Going Strong – Analyst Blog

Energy delivery company – CenterPoint Energy Inc. (CNP) – posted earnings of 32 cents per share in the first quarter of 2010, three cents higher than the Zacks Consensus Estimate of 29 cents per share and higher than the year-ago quarterly earnings of 19 cents per share.

  

On a reported basis, including one-time items, earnings came in at 29 cents per share in the reported quarter compared with 19 cents per share in the year-ago quarter. The variance in reported and adjusted stems from the increase in federal income tax expense of five cents, seven cents gain from natural gas derivative and marketable contracts, and a five-cent loss from indexed debt securities. In the reported quarter, federal income tax expense rose due to the elimination of the tax deduction facility for Medicare benefit costs reimbursed.

 

 

CenterPoint Energy’s total revenues in the reported quarter increased 9.3% to $3 billion, compared with $2.8 billion in the year-ago quarter. Operating income in the reported quarter was $357 million compared with $285 million in the same period of 2009. The company reported a net income of $114 million compared with $67 million in the year-ago quarter.

  

  

  

The Electric Transmission & Distribution segment reported 53% higher operating income year over year of $107 million. Reported period operating income consists of $71 million from the regulated electric transmission & distribution utility operations (TDU) and $36 million related to transition and system restoration bond companies.

  

Operating income for TDU benefited from increased energy usage partially due to colder winter weather, the addition of nearly 22,000 metered customers since March 2009 and higher net transmission revenues.

  

  

The Natural Gas Distribution segment reported 18% higher operating income of $139 million. Operating income benefited from higher volume sales primarily due to colder winter weather in this segment’s southern service territories and lower bad debt expense.

  

 

The Interstate Pipelines segment reported a 4% higher operating income of $72 million. Operating income increased due to higher revenue from firm contracts primarily associated with the Carthage to Perryville pipeline, partially offset by lower revenue from off-system sales. 

  

  

The Field Services segment reported 12% lower operating income of $23 million. Revenue growth from higher gathering volumes, as well as higher liquids prices in this segment’s processing business, were more than offset by the impact of lower natural gas prices and higher operating expenses primarily related to facility expansions.   

 

  

The Competitive Natural Gas Sales and Services segment reported an operating income of $15 million in the first quarter of 2010 compared with $2 million in the year-ago period. Operating income was boosted by gains of $3 million from mark-to-market accounting for derivatives associated with certain forward natural gas purchases and sales used to lock in economic margins.

 

 

CenterPoint Energy reported cash and cash equivalents of $329 million at the end of the reported quarter, up from $65 million at the end of the year-ago quarter. The company reported $435 million in cash from operating activities, compared with $433 million at the end of the year-ago period. Long-term debt decreased to $8.4 billion from $9.1 billion at fiscal-end 2009.