Pepco Holdings Q4 Profit Rises, Tops View; Guides 2014 EPS In Line

(RTTNews) - Electric and natural gas utility company Pepco Holdings, Inc. (POM) reported Friday a profit for the fourth quarter that grew from last year, drive by lower operation and maintenance expense as well as increased electric distribution revenues amid higher rates.

Adjusted earnings per share from continuing operations topped analysts' expectations. The company also provided earnings forecast for the full-year 2014, in line with Street view.

"We continue to be pleased with the progress we have made in improving reliability and customer satisfaction. Over the past three years, decreases in the duration and number of power outages have been dramatic, reflecting the significant investments we have made in the electric system," Chairman, President and CEO Joseph Rigby said in a statement.

The Washington, DC-based company, one of the largest energy delivery companies in the Mid-Atlantic region, reported a net income of $58 million or $0.23 per share for the fourth quarter, higher than $43 million or $0.18 per share in the prior-year quarter.

Net income from continuing operations for the quarter grew to $58 million or $0.23 per share from $34 million or $0.15 per share last year.

Excluding items, adjusted earnings from continuing operations for the quarter was $61 million or $0.24 per share, compared to $38 million or $0.17 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to post earnings of $0.21 per share for the quarter. Analysts' estimate typically excludes one-time items.

Total operating revenues for the quarter grew to $1.09 billion from $1.06 billion in the same quarter last year.

Total electric operating revenue grew to $990 million from $945 million in the year-ago quarter.

The company's power delivery electric sales for the quarter grew to 11,085 gigawatt hours or Gwh, from last year's 10,992 Gwh. Weather-adjusted electric sales were 11,013 Gwh, compared to last year's 11,095 Gwh.

Operating income for the quarter was $155 million, higher than $102 million in the prior-year quarter, as total expenses decreased to $936 million from $954 million in the prior-year quarter.

For fiscal 2013, the company reported a net loss of $212 million or $0.86 per share, compared to net income of $285 million or $1.24 per share in the prior year. Net income from continuing operations about halved to $110 million or $0.45 per share from $218 million or $0.95 per share last year.

Excluding items, adjusted earnings from continuing operations for the year was $280 million or $1.14 per share, compared to $225 million or $0.98 per share in the year ago.

Total operating revenues for the full year increased to $4.67 billion from $4.63 billion in the previous year.

Analysts expected the company to report full-year 2013 earnings of $1.12 per share on annual revenues of $4.76 billion.

Looking ahead to fiscal 2014, Pepco Holdings expects earnings in a range of $1.12 to $1.27 per share. Street is currently looking for full-year 2014 earnings of $1.22 per share.

"We continue to work to identify cost recovery mechanisms that will better align the timing of when assets are placed in service with when customers begin to pay for using the assets. We will also continue to seek approaches that will mitigate the need to file frequent rate cases," Rigby added.

POM closed Thursday's regular trading session at $20.43, down $0.17 on a volume of 2.80 million shares.