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Dominion (D) Q4 Earnings Lag Estimates, Issues '17 Outlook
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Dominion Resources Inc. (D - Free Report) reported fourth-quarter 2016 operating earnings of 99 cents per share, lagging the Zacks Consensus Estimate of $1.00 by a penny. Earnings were, however, within management’s guidance range of 90 cents to $1.10 per share. Operating earnings also increased 41.4% from 70 cents earned a year ago.
GAAP earnings were 73 cents per share compared with 60 cents in the year-ago quarter. The difference between GAAP and operating earnings in the reported quarter was due to charges associated with future ash pond and landfill closures.
Full-year operating earnings came in at $3.80 per share, up 10.5% from the 2015 tally of $3.25. The year-over-year improvement was driven by growth projects in its regulated electric and gas service areas, lower capacity expenses, and investment tax credits from solar facilities. Reported earnings were, however, lower than the Zacks Consensus Estimate of $3.81.
Total Revenue
Dominion’s total revenue came in at $3,100 million, missing the Zacks Consensus Estimate of $3,391 million by 8.6%. However, quarterly revenues were up 20.2% year over year.
Full-year revenues inched up 0.3% from than the prior-year figure of $11.72 billion to $11.75 billion. The top line, however, missed the Zacks Consensus Estimate of $11.90 billion.
Dominion Resources, Inc. Price, Consensus and EPS Surprise
Total operating expenses in the quarter increased 11.3% year over year to $2,032 million primarily due to a 10.8% surge in other operations and maintenance expenses.
Interest and related charges in the reported quarter were $292 million, up 28.6% from the year-ago quarter.
Dominion Virginia Power recorded 1% year-over-year growth in its customer base. Thanks to new customer additions, electricity sales volumes increased 6.8% to 19,545 Gwh.
Segment Update
Dominion Virginia Power recorded net income of $121 million or 19 cents per share in the fourth quarter of 2016, up 12.1% year over year.
Dominion Energy recorded earnings of $243 million or 39 cents per share, up 42.1%.
Dominion Generation’s earnings were up 51.8% to $331 million or 53 cents per share.
Corporate and Others incurred a wider loss of $77 million or 12 cents.
Financial Update
Dominion exited fourth-quarter 2016 with cash and cash equivalents of $261 million, down from $607 million as of Dec 31 2015.
Long-term debt as of Dec 31, 2016 was $30.2 billion compared with $23.5 billion at the end of 2015.
Cash from operating activities in 2016 was $4.12 billion, down 7.8% from $4.47 billion in the year-ago period.
Looking Ahead
In first-quarter 2017, Dominion expects to generate operating earnings of 90 cents to $1.10 per share. In the year-ago quarter, the company had reported earnings of 96 cents.
For the full year, Dominion guided earnings in the range of $3.40 to $3.90 per share.
Peer Releases
American Electric Power Co., Inc. (AEP - Free Report) reported fourth-quarter 2016 operating earnings of 67 cents per share, beating the Zacks Consensus Estimate of 55 cents by 21.8%.
NextEra Energy, Inc. (NEE - Free Report) reported fourth-quarter 2016 adjusted earnings of $1.21 per share, missing the Zacks Consensus Estimate of $1.29 by 6.2%. Reported earnings were, however, up 3.4% year over year.
WEC Energy Group (WEC - Free Report) reported fourth-quarter 2016 adjusted earnings of 61 cents per share, a penny lower than both the Zacks Consensus Estimate and the year-ago figure of 62 cents.
Our View
Even though Dominion’s earnings and revenues were both lower than expectations, the company is poised to gain from its organic and inorganic growth strategies. The company started construction of the 1,588-MW Greensville County combined-cycle power station, which will be able to power nearly 400,000 customers. The project is progressing within budget and on time.
Meanwhile, the company’s ongoing focus on increasing its clean generation capacity and strengthening the existing infrastructure will help Dominion serve its expanding customer base better. Incidentally, Dominion Virginia Power catered to 1% more customers in the fourth quarter than the prior-year period.
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Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Dominion (D) Q4 Earnings Lag Estimates, Issues '17 Outlook
Dominion Resources Inc. (D - Free Report) reported fourth-quarter 2016 operating earnings of 99 cents per share, lagging the Zacks Consensus Estimate of $1.00 by a penny. Earnings were, however, within management’s guidance range of 90 cents to $1.10 per share. Operating earnings also increased 41.4% from 70 cents earned a year ago.
GAAP earnings were 73 cents per share compared with 60 cents in the year-ago quarter. The difference between GAAP and operating earnings in the reported quarter was due to charges associated with future ash pond and landfill closures.
Full-year operating earnings came in at $3.80 per share, up 10.5% from the 2015 tally of $3.25. The year-over-year improvement was driven by growth projects in its regulated electric and gas service areas, lower capacity expenses, and investment tax credits from solar facilities. Reported earnings were, however, lower than the Zacks Consensus Estimate of $3.81.
Total Revenue
Dominion’s total revenue came in at $3,100 million, missing the Zacks Consensus Estimate of $3,391 million by 8.6%. However, quarterly revenues were up 20.2% year over year.
Full-year revenues inched up 0.3% from than the prior-year figure of $11.72 billion to $11.75 billion. The top line, however, missed the Zacks Consensus Estimate of $11.90 billion.
Dominion Resources, Inc. Price, Consensus and EPS Surprise
Dominion Resources, Inc. Price, Consensus and EPS Surprise | Dominion Resources, Inc. Quote
Highlights of the Release
Total operating expenses in the quarter increased 11.3% year over year to $2,032 million primarily due to a 10.8% surge in other operations and maintenance expenses.
Interest and related charges in the reported quarter were $292 million, up 28.6% from the year-ago quarter.
Dominion Virginia Power recorded 1% year-over-year growth in its customer base. Thanks to new customer additions, electricity sales volumes increased 6.8% to 19,545 Gwh.
Segment Update
Dominion Virginia Power recorded net income of $121 million or 19 cents per share in the fourth quarter of 2016, up 12.1% year over year.
Dominion Energy recorded earnings of $243 million or 39 cents per share, up 42.1%.
Dominion Generation’s earnings were up 51.8% to $331 million or 53 cents per share.
Corporate and Others incurred a wider loss of $77 million or 12 cents.
Financial Update
Dominion exited fourth-quarter 2016 with cash and cash equivalents of $261 million, down from $607 million as of Dec 31 2015.
Long-term debt as of Dec 31, 2016 was $30.2 billion compared with $23.5 billion at the end of 2015.
Cash from operating activities in 2016 was $4.12 billion, down 7.8% from $4.47 billion in the year-ago period.
Looking Ahead
In first-quarter 2017, Dominion expects to generate operating earnings of 90 cents to $1.10 per share. In the year-ago quarter, the company had reported earnings of 96 cents.
For the full year, Dominion guided earnings in the range of $3.40 to $3.90 per share.
Peer Releases
American Electric Power Co., Inc. (AEP - Free Report) reported fourth-quarter 2016 operating earnings of 67 cents per share, beating the Zacks Consensus Estimate of 55 cents by 21.8%.
NextEra Energy, Inc. (NEE - Free Report) reported fourth-quarter 2016 adjusted earnings of $1.21 per share, missing the Zacks Consensus Estimate of $1.29 by 6.2%. Reported earnings were, however, up 3.4% year over year.
WEC Energy Group (WEC - Free Report) reported fourth-quarter 2016 adjusted earnings of 61 cents per share, a penny lower than both the Zacks Consensus Estimate and the year-ago figure of 62 cents.
Our View
Even though Dominion’s earnings and revenues were both lower than expectations, the company is poised to gain from its organic and inorganic growth strategies. The company started construction of the 1,588-MW Greensville County combined-cycle power station, which will be able to power nearly 400,000 customers. The project is progressing within budget and on time.
Meanwhile, the company’s ongoing focus on increasing its clean generation capacity and strengthening the existing infrastructure will help Dominion serve its expanding customer base better. Incidentally, Dominion Virginia Power catered to 1% more customers in the fourth quarter than the prior-year period.
Dominion Resources holds a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>