Integrys Energy Behind Estimates – Analyst Blog

Integrys Energy Group Inc. (TEG) reported adjusted earnings of $1.49 per share, well behind the Zacks Consensus Estimate and year-ago earnings of $1.57. On a reported basis, the company reported earnings of 64 cents per share compared with a loss of $2.35 per share in the year-ago quarter.

 

 

Net revenue in the quarter dropped 40.5% to $1.9 billion, primarily due to a sharp decline in non-regulated revenues as well as lower utility revenues. Non-regulated business revenues in the quarter were $646.8 million (down 63.8%) and Utility revenues were $1.3 billion (down 11.2%). The company reported a net income of $49.5 million compared with $180.2 million in the year-ago quarter.

 

Segmental Results

Figures for the segments are as follows:

 

Natural Gas Utility Segment: In the first quarter of 2010, the regulated Natural Gas Utility segment helped by higher rates recorded a net income of $69.7 million, compared with a net loss of $173.1 million during the same quarter in 2009. Year-ago earnings were affected by a non-cash after-tax goodwill impairment loss of $248.8 million.

 

Electric Utility Segment: The regulated Electric Utility segment registered a net income of $26.1 million, compared with a net income of $27.1 million during the same quarter in 2009. Net income declined marginally mainly due to the impact of the changes in federal health care legislation that became law in March 2010 and higher operating and maintenance expense.

 

Electric Transmission Investment Segment: The Electric Transmission Investment segment increased $0.8 million over the first quarter of 2009 to $11.6 million in the first quarter of 2010.

 

Integrys Energy Services Segment: Segmental net loss increased $19.4 million to reach $48.5 million in the reported quarter from a net loss of $29.1 million in the year-ago quarter. This was primarily due to the loss from asset disposals and a decrease in both realized retail and realized wholesale electric and natural gas margins.

 

Holding Company and Other Segment: The net loss related to the segment decreased by $6.5 million from $15.9 million in the year-ago quarter to $9.4 million in the reported quarter. This was due to a change in the effective income tax rate year-over-year.

 

 

Integrys Energy reported $419.4 million in cash from operating activities in the reported quarter, compared with $852.6 million in the year-ago quarter. Cash and cash equivalents at the end of the reported period was $259.1 million compared with $331.7 million at the end of the year-ago period. Long-term debt reduced to $2.1 billion compared with $2.4 billion at the end of the year-ago period.

 

 

Integrys Energy reduced its fiscal 2010 earnings guidance range to $2.94 – $3.22 per share from the earlier range of $3.09 – $3.37 to reflect the impact of the recently passed health care reform bill. For fiscal 2011, the company reaffirmed its earnings per share outlook in a range of $3.28 – $3.61. The Zacks Consensus Estimates for fiscal years 2010 and 2011 currently stand at $3.09 and $3.33, respectively.

 

Integrys Energy also reaffirmed its expected long-term earnings per share growth rate of 4% – 6% on an average annualized basis, using 2011 as the base year, through 2015.