Public Service Enterprise Group Inc. (PEG) or PSEG reported third-quarter 2010 operating earnings per share (EPS) of $1.06 compared with the Zacks Consensus Estimate of 96 cents and 92 cents in the year-ago quarter.
On a reported basis, including one-time items, earnings came in at $1.12 in the reported quarter compared with 96 cents in the year-ago quarter. Numbers rose on the back of a warmer weather precipitating larger consumption of units along with higher electric delivery rates.
The 6-cent variance in the period between the reported and adjusted earnings came from the impact of gain on Nuclear Decommissioning Trust Fund Related Activity (2 cents) and gain on mark-to-market (4 cents).
Operational Performance
Revenues rose $214 million in the reported quarter to $3.3 billion from approximately $3 billion in the year-ago period. However, the top-line fell short of the Zacks Consensus Estimate by $43 million.
Operating income was just above $1 billion compared to $924 million in the year-ago period. Overall net income for the reported quarter was $567 million compared to $488 million for the year-ago period.
Segmental Operational Performance
PSEG Power: PSEG Power reported operating earnings of $355 million (70 cents per share) for the reported quarter compared with operating earnings of $358 million (71 cents per share) in the year-ago quarter.
PSE&G: PSE&G reported operating earnings of $155 million (30 cents per share) in the reported quarter compared with operating earnings of $87 million (17 cents per share) in the year-ago quarter.
PSEG Energy Holdings: PSEG Energy Holdings reported operating earnings of $24 million (5 cents per share) for the reported quarter versus an operating loss of $1 million during the third quarter of 2009.
Other Items
Finally, lower interest cost added a cent to the year-over-year EPS variance.
Financial Condition
Public Service reported $1.3 billion in cash from operating activities in the first nine months of fiscal 2010 in line with the year-ago period. Cash and cash equivalents at the end of the reported period were $332 million compared with $130 million at the end of the year-ago period. Total debt increased to $9.2 billion compared with $8.7 billion at fiscal-end 2009.
Outlook
Public Service reaffirmed its fiscal 2010 EPS guidance range of $3.00 – $3.25. This is in line with the Zacks Consensus Estimate of $3.13.
We maintain our market Neutral recommendation on the Zacks #3 Rank (Hold) stock.
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
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