CenterPoint Energy Beats on Earnings, Revs - Analyst Blog

CenterPoint Energy, Inc. CNP reported its first quarter 2014 adjusted earnings of 43 cents per share, surpassing both the Zacks Consensus Estimate as well as the prior-year bottom line of 34 cents by 26.5%. The earnings outperformance was primarily driven by an increase in customer counts and colder-than-normal winter.

Total Revenue

CenterPoint Energy's total revenue for the reported quarter was $3,163 million, beating the Zacks Consensus Estimate of $2,161 million by 46.4%. Quarterly revenues improved 32.5% from the year-ago figure.

Operational Results

CenterPoint Energy's total expenses rose 39.5% year over year to $2,868 million, primarily due to a surge in natural gas expenses.

The company's operating income decreased 11.1% year over year to $295 million in the reported quarter.

In first quarter 2014, total interest expenses decreased 14.2% year over year to $114 million.

Segment Results

In first quarter 2014, CenterPoint Energy's Electric Transmission & Distribution segment reported an operating income of $105 million, up 25% year over year. Natural Gas Distribution's operating income climbed 16.5% year over year to $162 million. The Energy Services segment's operating income skyrocketed 271.4% year over year to $26 million. The Other Operations segment reported an operating income of $2 million. The Interstate Pipelines and Field Services segments did not post any operating income.

Financial Condition

As of Mar 31, 2014, CenterPoint Energy reported cash and cash equivalents of $379 million, up from $208 million as of Dec 31, 2013.

Total long-term debt was $8,056 million as of Mar 31, 2014, up from $7,817 million at the end of Dec 31, 2013.

In the first three months of 2014, the company's net cash provided by operating activities was $380 million, considerably lower than $533 million in the year-ago comparable period.

In the reported quarter, CenterPoint Energy's total capital expenditures increased 14.4% to $286 million from $250 million in the year ago comparable period, primarily on the back of higher investments in the Electric Transmission & Distribution and Natural Gas Distribution segments.

Guidance

CenterPoint Energy increased its guidance for 2014 earnings to $1.10 - $1.19 per share from the previous projection of $1.08 - $1.17 per share. The upward revisions of earnings guidance was mainly driven by a rise in estimates for utility operations earnings.

Peer Reviews

Exelon Corp. EXC announced first quarter 2014 adjusted operating earnings of 62 cents per share, missing the Zacks Consensus Estimate by 10.1%.

Zacks Rank

CenterPoint Energy currently has a Zacks Rank #3 (Hold). However, some better-ranked stocks in the same industry include CMS Energy Corp. CMS and Entergy Corp. ETR. Each stock carries a Zacks Rank #1 (Strong Buy).