Public Service Enterprise Group Inc. (PEG) reported low first-quarter 2010 operating earnings per share (EPS) of 84 cents compared with the Zacks Consensus Estimate of 86 cents and the year-ago quarter results of 95 cents. On a reported basis, including one-time items, earnings came in at 97 cents in the reported quarter compared with 88 cents in the year-ago quarter.
Operational Performance
Revenues nose-dived 6.1% in the reported quarter to $3.7 billion from $3.9 billion in the year-ago period. Operating earnings were $425 million, compared with $482 million in the year-ago quarter. Net income was $491 million, compared with $444 million in the year-ago quarter.
Segmental Operational Performance
PSEG Power
PSEG Power reported operating earnings of $298 million or 59 cents per share, compared with operating earnings of $352 million, or 69 cents for the first quarter of 2009.
The variance in earnings year-over-year results were due to weak power prices which more than offset higher electricity volume sales. This deducted five cents per share over the year-ago quarter. A decline in gas prices/volumes and other trading related activity reduced earnings by further four cents per chare. Lastly, higher operations and maintenance expense and federal income tax expense reduced earnings by four cents.
All this was partially offset by a quarter-over-quarter decline in depreciation and financing costs of three cents per share.
PSE&G
PSE&G reported operating earnings of $117 million or 23 cents per share compared with operating earnings of $123 million or 24 cents per share in the year-ago quarter. The variance in year-over-year earnings per share was due to warmer-than-normal weather which chipped away two cents, while higher operations and maintenance expense took away another two cents.
This was partially offset by higher transmission margin and other items, which added 2 cents to the positive year-over-year.
PSEG Energy Holdings
PSEG Energy Holdings reported operating earnings of $7 million or 1 cent per share, compared to operating earnings of $11 million or 2 cents per share in the year-ago quarter. The variance in year-over-year earnings per share was due to lower project earnings and lower gains on lease sales, which deducted a penny from reported quarterly earnings.
Other Items
Finally, lower interest cost added a cent to the year-over-year EPS variance.
Financial Condition
Public Service reported $1.1 billion in cash from operating activities in the reported quarter, compared with $1.4 billion reported in the year-ago quarter. Cash and cash equivalents at the end of the reported period was $312 million compared with $1.2 billion at the end of the year-ago period. Total debt reduced to $8.2 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. As of now, the fiscal 2010 Zacks Consensus EPS estimate is presently $3.13.
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