PPL Corp. (PPL) Beats Q4 Earnings Estimates, Gives '18 View

PPL Corporation (NYSE:PPL) reported fourth-quarter 2017 adjusted earnings of 55 cents per share, beating the Zacks Consensus Estimate of 48 cents by 14.6%. However, earnings declined 8.3% year over year, primarily due to lower contribution from U.K. Regulated segment.

On a GAAP basis, the company reported earnings per share of 11 cents in the quarter compared with 68 cents a year ago. The difference between GAAP and operating earnings in the reported quarter was due to one-time charge of 44 cents primarily to the impact of U.S. tax reforms.

Total Revenues

PPL Corp.’s total revenues were $1,926 million in the fourth quarter, beating the Zacks Consensus Estimate of $1,855 million by 3.8%. Revenues also improved 5.1% year over year.

Segment Results

U.K. Regulated: Adjusted earnings decreased 27.5% from the prior-year quarter to 29 cents per share. The decline was primarily due to lower foreign currency exchange rates in 2017 and lower sales volumes.

Kentucky Regulated: Adjusted earnings were 14 cents, up 16.7% from the year-ago quarter. The earnings are primarily driven by higher base electricity and gas rates effective Jul 1, 2017, and higher sales volumes due to favorable weather, partially offset by higher depreciation expense.

Pennsylvania Regulated: Adjusted earnings in the quarter were 14 cents, up 27.3% from the year-ago quarter. The year-over-year improvement was due to lower operating and maintenance expenses, and higher transmission earnings due to additional capital investments.

Corporate and Other: It includes unallocated corporate-level financing and other costs. The segment reported a loss of 2 cents for the quarter against a loss of 3 cents in the prior-year quarter.

Operational Highlights

PPL Corp.’s total operating expenses increased 1.3% year over year to $ 1,133 million in the reported quarter.

The company reported operating income of $793 million, up 11.1% from the prior-year quarter.

Interest expenses increased 6.9% to $232 million compared with the year-ago quarter’s figure of $217 million.

Financial Position

As of Dec 31, 2017, PPL Corp. had cash and cash equivalents of $485 million compared with $341 million as of Dec 31, 2016.

Long-term debt (excluding debts due within one year) was $19,847 million as of Dec 31, 2017, compared with $17,808 million at the end of 2016.

In 2017, net cash flow from operating activities was $2,461 million compared with $2,890 million in 2016.

Guidance

PPL Corp. expects 2018 adjusted earnings to be in the range of $2.20-$2.40 per share. The company also provided compound earnings growth guidance of 5-6% from 2018 through 2020 with 2017 as the base.

Zacks Rank

PPL Corp. carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

WEC Energy Group (NYSE:WEC) reported fourth-quarter 2017 operating earnings of 71 cents per share, beating the Zacks Consensus Estimate of 67 cents by 5.9%.

NextEra Energy, Inc. (NYSE:NEE) reported fourth-quarter 2017 adjusted earnings of $1.25 per share, lagging the Zacks Consensus Estimate of $1.31 by 4.6%.

FirstEnergy Corp. (NYSE:FE) reported operating earnings of 71 cents per share, beating the Zacks Consensus Estimate of 69 cents by 2.9%.

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