Great Plains Energy Misses on Earnings, Beats Revs - Analyst Blog

Great Plains Energy Inc. GXP reported first-quarter 2014 earnings of 15 cents per share, missing the Zacks Consensus Estimate of 18 cents by 16.7%. Also, quarterly earnings decreased 11.8% from 17 cents a year ago, primarily due to higher total operating expenses and marginal increase in shares outstanding.

Great Plains Energy released its first-quarter results after the market closed on May 8, 2014. On May 9, the share price edged down 3.1% to $26.19 from the previous day's closing. An unfavorable earnings result could have led to the drop in share price.

Revenue

In first-quarter 2014, Great Plains Energy's operating revenues were $585.1 million, surpassing the Zacks Consensus Estimate of $533 million by 9.8%. Reported revenues surged 7.9% from $542.2 million a year ago. The outperformance was mainly driven by higher retail and wholesale sales, and a rise in heating degree days.

Highlights of the Release

In the quarter under review, Great Plains Energy's total operating expenses increased 11.2% year over year to $507.2 million. Higher utility operating and maintenance expenses, fuel and purchased power costs, and transmission expenses led to the surge in total operating expenses.

The company's operating income was $77.9 million, down 9.5% from $86.1 million in the year-ago quarter.

Interest expenses during the quarter edged down 0.6% year over year to $49.4 million due to lower long-term debt level.

Under the electric utility generation, Great Plains Energy's total net electricity generation in the first quarter increased 9.6% year over year to 6,686 megawatt hour (MWh).

Financial Screening

Great Plains Energy's cash and cash equivalents, as of Mar 31, 2014, were $13.6 million versus $10.6 million as of Dec 31, 2013.

Long-term debt, as of Mar 31, 2014, was $3,488.2 million compared with $3,515.7 million as of Dec 31, 2013.

In the first three months of 2014, the company's net cash from operating activities was $107.3 million, up from $89.0 million in the year-ago comparable period.

During the quarter, Great Plains Energy spent $185.2 million as utility capital expenditures, up 7.5% from the prior-year comparable figure.

Guidance

Great Plains Energy confirmed its 2014 earnings guidance in the range of $1.60 to $1.75 per share.

Other Earnings Releases

American Electric Power Company Inc. AEP reported first-quarter 2014 operating earnings of $1.15 per share, beating the Zacks Consensus Estimate by 26.4%.

Brookfield Infrastructure Partners L.P. BIP announced first-quarter 2014 earnings of 89 cents per unit, a penny higher than the Zacks Consensus Estimate.

NRG Energy, Inc. NRG reported first-quarter 2014 loss of 18 cents per share, wider than the Zacks Consensus Estimate of a loss of 12 cents per share.

Zacks Rank

Great Plains Energy currently holds a Zacks Rank #2 (Buy).