NiSource Beats Earnings Again, Guidance Reaffirmed - Analyst Blog

With first-quarter 2014 operating net earnings of 82 cents per share, NiSource Inc. NI delivered yet another quarter of positive earnings surprise. Earnings surpassed the Zacks Consensus Estimate by 5.3% and the year-ago number by 18.8%.

The year over year improvement was primarily due to better top-line performance.

The company recorded quarterly GAAP earnings of 85 cents per share compared with 69 cents per share in the prior year.

Total Revenues

NiSource's gross revenues during the quarter climbed 28.8% year over year to $2.29 billion. The top-line rise came on the back of higher contributions across the company's segments, comprising Gas Distribution, Gas Transportation and Storage, Electric Operations and Other segments.

Highlights of the Release

In the quarter under review, NiSource's total operating expenses increased 7.1% to $733.5 million from $684.6 million a year ago. The surge in expenses was primarily due to a 10.3% spike in operating and maintenance expenses and a 3.6% increase in depreciation and amortization expenses.

The magnitude of increase in revenues more than offset the magnitude of hike in expenses, inducing a nearly 19% rise in operating income.

Interest expenses increased 10.6% year over year to $109.1 million, primarily owing to an increase in debt level.

Financial Position

As of Mar 31, 2014, NiSource had cash and cash equivalents of $35 million, up 42% from $26.8 million as of Dec 31, 2013.

Long-term debt (excluding amounts due within one year) as of Mar 31, 2014 was $7,638.5 million versus $7,593.2 million as of Dec 31, 2013.

In the reported quarter, net cash flows provided by operating activities were $394.4 million versus $436.8 million in the year-ago quarter.

NiSource's capital expenditure was $386.3 million in the first quarter compared with $369.3 million in the year-ago period.

Guidance

NiSource reaffirmed its 2014 net operating earnings expectation of $1.61–$1.71 per share. The company also has plans to remain focused on the execution of the huge capital investment program of about $2.2 billion in 2014.

At the Peer End

American Electric Power Co., Inc. AEP announced first-quarter 2014 earnings of $1.15 per share, surpassing the Zacks Consensus Estimate by 26.4%.

Entergy Corp. ETR announced its first-quarter earnings of $2.29 per share, exceeding the Zacks Consensus Estimate by 8.5%.

DTE Energy Co. DTE disclosed its first-quarter 2014 earnings of $1.69 per share, outpacing the Zacks Consensus Estimate by 19.9%.

Zacks Rank

NiSource currently has a Zacks Rank #3 (Hold).