Hawaiian Electric Industries Beats on Q2 Earnings

Hawaiian Electric Industries Inc. HE posted second quarter 2014 earnings of 41 cents per share, beating the Zacks Consensus Estimate of 39 cents by 5.1%. Earnings were in line with the year-ago figure.

The year-over-year improvement in its Electric Utility segment was offset by soft performance from its Banking and Other segments.

Total Revenues

Total revenues at the end of the reported quarter were $798.6 million, up a marginal 0.5% year over year. Reported results were also higher than the Zacks Consensus Estimate of $796.0 million by 0.3%.

Operating Statistics

Total expenses were up 0.3% year over year to $716.4 million.

Total operating income was $82.3 million, up 2.6% year over year.

Segment Details

Electric Utility: Segment revenues in the reported quarter were $738.4 million, up 1.4% year over year. Segment net income increased 19.2% year over year to $34.2 million. The upside was primarily due to higher revenues, which was marginally offset by steeper operations and maintenance and interest expenses.

Banking: Segment revenues in the reported quarter were $60.6 million, down 8.1% year over year. Hawaiian Electric's Banking segment recorded a net income of $11.7 million in the reported quarter, down 26.4% from $15.9 million in the year-ago quarter. The year-over-year decline was due to lower interchange fees due to Durbin Amendment, decrease in mortgage banking income, lower gain on sales of securities and higher provision for loan losses.

Other: The segment reported a quarterly net loss of $4.5 million, wider than the year-earlier loss of nearly $4 million. The wider loss was primarily due to higher administrative and general expenses.

Financial Update

Cash and cash equivalents as of Jun 30, 2014, were $188.4 million, down from $220.0 million as of Dec 31, 2013. Long-term debt, net other than bank was $1,517.9 million, up from the 2013 year-end level of $1,492.9 million.

Cash from operating activities in the first half of 2014 was $46.2 million versus $130.8 million in the comparable year-ago period. Capital expenditure in the aforesaid period was $149.3 million, down nearly 6% from the year-ago period.

Other Company Release

DTE Energy Company DTE reported second quarter 2014 operating earnings per share of 73 cents, lagging the Zacks Consensus Estimate of 77 cents by 5.2%.

Entergy Corporation's ETR second quarter 2014 operational earnings came in at $1.11 per share in the quarter, lagging the Zacks Consensus Estimate of $1.14 by 2.6%.

CMS Energy Corporation CMS posted second quarter 2014 earnings per share of 30 cents, beating the Zacks Consensus Estimate of 26 cents by 15.4%.

Our Take

Hawaiian Electric Industries was able to keep the earnings streak alive thanks to the strong performance from its Electric Utility and a healthy Hawaiian economy.

The investments made by Hawaiian Electric Industries to strengthen its operations aided by an improving Hawaiian economy will likely offer further opportunities to the company to boost its earnings going forward.

Hawaiian Electric currently holds a Zacks Rank #3 (Hold).