PPL Corporation (NYSE:PPL) reported second-quarter 2016 adjusted earnings of 56 cents per share, topping the Zacks Consensus Estimate of 53 cents by 5.7%. Reported earnings also increased 14.3% on a year-over-year basis.
On a GAAP basis, the company posted earnings per share of 71 cents in the quarter compared with $1.13 a year ago. The difference between GAAP and operating earnings in the reported quarter was due to 15 cents of foreign currency related economic hedges.
Total Revenue
PPL Corp.’s total revenue of $1,785 million marginally beat the Zacks Consensus Estimate and the year-ago tally of $1,781 million by 0.2%.
Segment Results
UK Regulated: Adjusted earnings of 36 cents per share were on par with the prior-year figure. This was primarily backed by rate base increase, offset by the negative impact of a lower British pound sterling.
Kentucky Regulated: Adjusted earnings increased by 2 cents per share to 11 cents per share. This was primarily due to higher base electricity rates effective Jul 1, 2015, and lower operation and maintenance expense.
Pennsylvania Regulated: Adjusted earnings in the reported quarter increased by 4 cents per share to 11 cents, driven primarily by higher base electricity rates for distribution effective Jan 1, 2016, and higher transmission margins.
Corporate and Other: It includes unallocated corporate-level financing and other costs. Adjusted loss narrowed from 3 cents per share to 2 cents per share.
Operational Highlights
PPL Corp.’s total operating expenses decreased 7.3% year over year to $1,060 million in the reported quarter, primarily due to lower fuel and energy purchases.
The company registered operating income of $725 million, up 13.6% from $638 million a year ago.
Interest expenses rose 4.2% to $224 million from $215 million a year ago.
Financial Position
As of Jun 30, 2016, PPL Corp. had cash and cash equivalents of $492 million, compared with $836 million as of Dec 31, 2015.
Long-term debt (excluding debts due within one year) was $18,949 million as of Jun 30, 2016, compared with $18,563 million as of 2015 end.
In the first six months of 2016, net cash flow from operating activities (continuing operations) was $1,170 million, compared with $970 million in the prior-year period.
Guidance
PPL Corp. reaffirmed its 2016 adjusted earnings guidance in the range of $2.25 to $2.45 per share (midpoint $2.35).Midpoint of the adjusted earnings guidance for UK Regulated, Kentucky Regulated and Pennsylvania Regulated are $1.41, 57 cents and 47 cents, respectively, for the year.
The company has provided its earnings guidance for 2017 in the range of $2.05–$2.25 per share (midpoint $2.15).
The company expects annual earnings growth of 5–6% between 2017 and 2020.
Upcoming Peer Releases
NiSource Inc. (NYSE:NI) reported second-quarter 2016 operating earnings of 8 cents per share, surpassing the Zacks Consensus Estimate of 7 cents by 14.3%.
FirstEnergy Corporation (NYSE:FE) announced second-quarter 2016 operating earnings of 56 cents per share, beating the Zacks Consensus Estimate of 53 cents by 5.7%.
NextEra Energy, Inc. (NYSE:NEE) reported second-quarter 2016 adjusted earnings of $1.67 per share, outpacing the Zacks Consensus Estimate of $1.58 by 5.7%.
Zacks Rank
PPL Corp. currently has a Zacks Rank #3 (Hold).
NEXTERA ENERGY (NEE): Free Stock Analysis Report
NISOURCE INC (NI): Free Stock Analysis Report
FIRSTENERGY CP (FE): Free Stock Analysis Report
PPL CORP (PPL): Free Stock Analysis Report
Original post
Zacks Investment Research