ALLETE, Inc. (NYSE:ALE) reported second-quarter 2016 earnings of 50 cents per share, lagging the Zacks Consensus Estimate of 51 cents by a penny. On a year-over-year basis, earnings increased 8.7%.
The second-quarter results reflect, on one hand, lower industrial sales and, on the other, higher depreciation and property tax expense, partially offset by increased sales to other power suppliers and the lower operating and maintenance expense
Lower-than-expected performance negatively impacted ALLETE’s share price, with the stock slipping 1.96% yesterday to $62.50 at close.
Total Revenue
In the second quarter of 2016, ALLETE posted total revenue of $314.8 million, which was down 2.6% year over year.
Highlights of the Release
ALLETE’s total electricity sales volume decreased 0.8% year over year to 3,461 kilowatt-hours.
In the first half of 2016, a warmer than normal winter weather tackled at Minnesota Power, and slightly out-of-ordinary, late spring wind conditions tackled at ALLETE Clean Energy negatively impacted earnings by nearly 5 cents per share.
The company’s total operating expenses were $272.6 million, down 3.9% year over year due to lower cost of sales.
Operating income in the reported quarter was up 6.8% year over year to $42.2 million.
In the quarter under review, interest expenses increased 7.4% year over year to $17.4 million.
Financial Update
ALLETE’s cash and cash equivalents, as of Jun 30, 2016, were $91.9 million, down from $97 million as of Dec 31, 2015.
Long-term debt, as of Jun 30, 2016, was $1,498.9 million, lower than $1,568.7 million at 2015 end.
2016 Guidance
ALLETE expects its 2016 earnings to be at the lower end of the projected range of $3.10 to $3.40 per share.
Other Utility Releases
American Electric Power Co., Inc. (NYSE:AEP) reported second-quarter 2016 operating earnings of 95 cents per share, beating the Zacks Consensus Estimate of 90 cents by 5.6%.
DTE Energy Company (NYSE:DTE) reported second-quarter 2016 operating earnings per share of 98 cents, beating the Zacks Consensus Estimate of 90 cents by 8.9%.
Dominion Resources Inc. (NYSE:D) reported second-quarter 2016 operating earnings of 71 cents per share, in line with the Zacks Consensus Estimate.
Zacks Rank
ALLETE currently has a Zacks Rank #3 (Hold).
AMER ELEC PWR (AEP): Free Stock Analysis Report
DTE ENERGY CO (DTE): Free Stock Analysis Report
DOMINION RES VA (D): Free Stock Analysis Report
ALLETE INC (ALE): Free Stock Analysis Report
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