Weather, power plant push up NV Energy earnings
A sweltering summer and a rate increase helped boost NV Energy’s bottom line in the second quarter, the utility reported Friday.
In the quarter that ended June 30, NV Energy posted net income of $69.4 million, or 29 cents a share, compared with net income of $12.9 million, or 5 cents a share, in the same period a year earlier.
The results bested analyst estimates, which Thomson Reuters pegged at 18 cents a share.
Hotter-than-average weather increased year-over-year earnings per share by 11 cents. Warmer temperatures also improved the bottom line by 7 cents per share over the company’s typical second-quarter earnings. Cooling-degree days, which measure average temperatures and how those temperatures spur air-conditioning demand, increased 44 percent from the second quarter of 2011. Cooling-degree days also were 23 percent higher than normal.
A Jan. 1 rate increase contributed 10 cents to the company’s increased earnings per share. The Public Utilities Commission of Nevada approved the rate jump, which included a 3.5 percent residential increase, to help cover the company’s Harry Allen power plant, which came online in May 2011.
Ratepayer growth added 1 cent to earnings. The utility reported a 1.4 percent gain year to year in customers.
NV Energy’s quarterly revenue jumped to $740.7 million. That’s up from $675 million in the same period in 2011.
Utility CEO Michael Yackira said operating and maintenance expenses were “virtually unchanged, reflecting the continued success of our cost-control efforts.”
The utility spent $128 million on operating and maintenance costs in the second quarter, down from $129.7 million in the same period of 2011. In the first six months of 2012, operating and maintenance expenses were $264.1 million, compared with $265.5 million in 2011.
Yackira noted that the company’s five-year bid to build plants and slash the state’s reliance on purchased power has resulted in residential rates that are roughly the same as they were five years ago, at around 11 cents per kilowatt hour.
Yackira also said in NV Energy’s earnings conference call that the company’s recent analysis of demand for new renewable transmission didn’t point to enough interest from developers to warrant new lines now.
“While we are disappointed, we remain committed to exploring other avenues for transmission investment,” Yackira said.
NV Energy also confirmed its earnings guidance of $1.15 to $1.25 a share for 2012.
Jonathan Halkyard, the utility’s chief financial officer, said earnings could be closer to $1.25 a share. That’s because the biggest chunk of the company’s yearly income comes in the third quarter. With a better-than-expected first half of the year, earnings could range on the high side of financial forecasts even if temperatures return to normal in the third quarter.
The company’s shares rose 37 cents, or 2 percent, Friday to close at $18.39 on the New York Stock Exchange.
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.
Financial reportCompany officials will discuss Friday’s financial report in an earnings conference call at 7 a.m. Friday. Listen in.
