Dominion (D) Lags Q4 Earnings Estimates, Beats Revenues

Dominion Energy Inc. (NYSE:D) reported fourth-quarter 2018 operating earnings of 89 cents per share, lagging the Zacks Consensus Estimate of 91 cents by 2.2%. However, operating earnings came within the guided range of 80-95 cents per share.

Operating earnings were lower than the year-ago quarter by 2.2%. The year-over-year decrease in earnings was due to lower renewable energy investment tax credits, higher storm restoration cost and increased interest expense, partially offset by the Cove Point liquefaction project and benefits of tax reform.

GAAP earnings were 97 cents per share compared with $2.04 in the year-ago quarter.

Total Revenues

Dominion’s total revenues came in at $3,361 million, beating the Zacks Consensus Estimate of $3,268 million by 2.84% and also improving 4.7% from $3,210 million in the year-ago quarter.

Highlights of the Release

Total operating expenses increased 11.9% year over year to $2,257 million due to higher electric fuel prices, along with an increase in operating and maintenance expenses.

Interest and related charges in the reported quarter were $440 million, up 46.7% from the year-ago period.

In the reported quarter, Power Delivery’s electric customer base increased by 26,156 from the prior-year level. Electricity consumption volumes also improved 2.9% year over year to 20,862 GWh in the fourth quarter.

The company’s net income in the reported quarter was $592 million, up 1.2% year over year.

Dominion expects construction work on the Atlantic Coast Pipeline to recommence during the third quarter of 2019, with partial in-service in late 2020 and full in-service in early 2021.

Segment Details

Power Delivery: Net income from this segment was $123 million, down 12.8% year over year.

Power Generation: The segment’s net income was $216 million, decreasing 30.5% year over year.

Gas Infrastructure: Net income from this segment was $374 million, up 31.2% on a year-over-year basis.

Corporate and Other: The segment’s net loss was $121 million compared with $152 million in the year-ago quarter.

Financial Update

Cash, restricted cash and cash equivalents as of Dec 31, 2018 were $391 million compared with $185 million on Dec 31, 2017.

Long-term debt as of Dec 31, 2018 was $31.14 billion compared with $30.94 billion at the end of 2017.

Cash from operating activities in 2018 was $4.77 billion, up 6% from $4.5 billion in 2017.

Guidance

For first-quarter 2019, Dominion expects operating earnings within $1.05-$1.25 per share.

For 2019, Dominion expects earnings per share in the range of $4.05-$4.40 compared with $4.05 in 2018. The midpoint of the guided range is $4.225, below the current Zacks Consensus Estimate for the period of $4.24.

Positive drivers include commercial operation of the Cove Point Liquefaction project, the addition of the Southeast Energy Group operating segment, and growth from regulated investment.

The company expects 2019 capital expenditure to be $6,283 million.

Zacks Rank

Currently, Dominion has a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Ameren Corp. (NYSE:AEE) is slated to release fourth-quarter earnings on Feb 14, before the opening bell. The Zacks Consensus Estimate for the quarter is pegged at 32 cents per share.

ALLETE Inc. (NYSE:ALE) is slated to release quarterly earnings on Feb 14, before the opening bell. The Zacks Consensus Estimate for the quarter to be reported is pegged at $1.14 per share.

Pinnacle West Capital Corp. (NYSE:PNW) is slated to release fourth-quarter earnings on Feb 22, before the opening bell. The Zacks Consensus Estimate for the quarter is pegged at 17 cents per share.

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