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Wisconsin Energy (WEC) Beats on Q3 Earnings, Down Y/Y

Wisconsin Energy Corporation (WEC) reported third-quarter 2014 adjusted earnings of 57 cents per share, surpassing the Zacks Consensus Estimate by 11.8%. Quarterly earnings decreased 5% from 60 cents a year ago, primarily due to higher depreciation and amortization expenses, and the cost of gas sold.

On a GAAP basis, the company’s earnings per share were 56 cents versus 60 cents a year ago. The difference between GAAP and adjusted earnings was due to a penny charge associated with the impending acquisition of Integrys Energy Group, Inc. (TEG).

Total Revenue

In the third quarter, Wisconsin Energy’s total revenue stood at $1,033.3 million, surpassing the Zacks Consensus Estimate of $1,027 million by 0.6%. However, the reported top line edged down 1.9% from $1,053.2 million in the prior-year quarter.

Operational Update

In the quarter under review, Wisconsin Energy’s total operating expenses edged down 0.6% year over year to $790.7 million, mainly due to decrease in fuel and purchased power expenses as well as other operation and maintenance expenses.

Operating income in the reported quarter was $246.1 million, down 4.6% from $258.0 million a year ago.

Wisconsin Energy’s third-quarter interest expenses decreased 2.6% year over year to $60.4 million.

Consumption of electricity by residential customers decreased 7.9% year over year. On a weather-normal basis, retail electricity consumption increased 1.8%.

Electricity utilization by large commercial and industrial customers (excluding the iron ore mines in Michigan's Upper Peninsula) edged up 0.1% year over year, while the use of electricity by small commercial and industrial customers dropped by 1.4%.

At the end of Sep 2014, Wisconsin Energy served around 4,400 and 6,700 more electricity and natural gas customers, respectively, from the prior-year level.

Financial Condition

As of Sep 30, 2014, Wisconsin Energy had cash and cash equivalents of $88.7 million versus $26 million as of Dec 31, 2013.

The company’s long-term debt increased to $4,569.6 million as of Sep 30, 2014 from $4,363.2 million as of Dec 31, 2013.

During the first nine months of 2014, cash from operating activities was $1,034.6 million, down from $1,050.3 million in the year-ago period.

Wisconsin Energy invested $513 million during the first nine months of 2014 as capital expenditure, compared with $497.7 million in the prior-year period.

Other Company Releases

American Electric Power Company Inc. (AEP) reported third-quarter 2014 operating earnings of $1.01 per share, missing the Zacks Consensus Estimate of $1.03 by 1.9%.

CMS Energy Corp. (CMS) reported third-quarter 2014 earnings of 37 cents per share on an adjusted basis. Quarterly earnings lagged the Zacks Consensus Estimate of 41 cents by 9.8%.

Zacks Rank

Wisconsin Energy currently holds a Zacks Rank #4 (Sell).

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