Public Service Enterprise Group Inc. (PEG) on Friday reported a profit for the fourth quarter that more than doubled from last year, reflecting one-time gains and higher revenues at the company's regulated utility associated with an expanded capital program that more than offset the impact of mild weather.
Both revenues and operating earnings for the quarter beat analysts' expectations. Looking ahead to fiscal 2015, the utility company forecast operating earnings in line with Street estimates.
Ralph Izzo, chairman, president and CEO of Public Service Enterprise Group said, "We are seeing the benefits of an expanded capital program contributing to double-digit earnings growth from our regulated company, PSE&G, which has grown to represent 52% of 2014's operating earnings while Power's successful management of its gas supply arrangements supported better than anticipated earnings."
For the fourth quarter, the Newark, New Jersey-based company's net income rose to $476 million or $0.94 per share from $200 million or $0.39 per share in the prior-year quarter.
The latest quarter's results include a gain on nuclear decommissioning trust fund related activity of $0.05 per share and a gain on mark-to-market of $0.40 per share.
Operating earnings for the quarter were $247 million or $0.49 per share, compared to $248 million or $0.49 per share in the year-ago quarter. On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.
Operating revenues for the quarter grew 19 percent to $2.77 billion from $2.32 billion in the year-ago period. Analysts had a consensus revenue estimate of $2.58 billion for the quarter.
Operating earnings for the PSE&G unit rose to $160 million or $0.32 per share from $144 million or $0.29 per share in the previous year. The higher earnings reflect a reduction in operating expenses and a return on the company's expanded infrastructure capital program, which more than offset the impact of mild weather on sales.
However, PSEG Power operating earnings declined to $91 million or $0.18 per share from $115 million or $0.23 per share in the same quarter last year. The results for the quarter were influenced by the known decline in capacity revenues, lower market prices for energy offset by the monetization of its gas supply position, and a reduction in operation and maintenance expense.
PSEG Enterprise/Other reported operating loss of $4 million or $0.01 per share, narrower than operating loss of $11 million or $0.03 per share in the year-ago period. The results reflect the inclusion of earnings from PSEG-Long Island's or PSEG-LI operating contract and a reduction in tax expense.
For fiscal 2014, Public Service Enterprise's net income rose to $1.52 billion or $2.99 per share from $1.24 billion or $2.45 per share last year. Operating earnings for the year were $1.40 billion or $2.76 per share, compared to $1.31 billion or $2.58 per share in the prior year.
Operating revenues for the year grew 9 percent to $10.89 billion from $9.97 billion in the previous year.
Street expected the company to earn $2.74 per share for the year on revenues of $10.64 billion.
Looking ahead to fiscal 2015, Public Service Enterprise forecast operating earnings in a range of $2.75 to $2.95 per share. Analysts expect the company to report earnings of $2.76 per share for the year.
PEG closed Thursday's trading at $40.28, down $0.26 or 0.64 percent on a volume of 2.94 million shares.
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