Post Earnings Coverage as Public Service Enterprise’s Adjusted EPS Grew 8%

Upcoming AWS Coverage on Sempra Energy Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 14, 2017 / Active Wall St. announces its post-earnings coverage on Public Service Enterprise Group Inc. (NYSE: PEG). The Company released its fourth quarter and fiscal 2016 financial results on February 24, 2017. The parent Company of PSEG Power and Public Service Electric & Gas Co. surpassed bottom-line expectations. Register with us now for your free membership at:

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One of Public Service Enterprise Group’s competitors within the Diversified Utilities space, Sempra Energy (NYSE: SRE), reported its 2016 financial results on February 28, 2017. AWS will be initiating a research report on Sempra Energy in the coming days.

Today, AWS is promoting its earnings coverage on PEG; touching on SRE. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended December 31, 2016, PSEG generated revenue of $2.09 billion, which missed analysts’ consensus of $2.29 billion. For FY16, the Company recorded revenues of $9.06 billion compared to revenue of $10.42 billion in FY15.

PSEG reported a net loss for Q4 2016 of $98 million, or $0.19 per share, compared to Q4 2015 net income of $309 million, or $0.60 per share. The Company’s net loss in the reported quarter reflects the impact of incremental depreciation expense and other expenses of $555 million pre-tax associated with the early retirement of the Hudson and Mercer coal/gas-fired generating stations. The Company’s non-GAAP operating earnings for the reported quarter were $279 million, or $0.54 per share, compared to the year earlier same quarter non-GAAP operating earnings of $255 million, or $0.50 per share. PSEG’s non-GAAP earnings surpassed market expectations of $0.52 per share.

PSEG reported 2016 net income of $887 million, or $1.75 per share, compared to net income of $1,679 million, or $3.30 per share for FY15. Non-GAAP operating earnings for FY16 were $1.48 billion or $2.90 per share, compared to FY16 non-GAAP operating earnings of $1.48 billion, or $2.91 per share.

Segment Results

PSE&G

PSE&G reported net income of $193 million, or $0.38 per share, for Q4 2016 bringing full year net income to $889 million, or $1.75 per share. On a comparative basis, PSE&G reported net income of $156 million, or $0.31 per share, and $787 million, or $1.55 per share, for Q4 and FY15, respectively. PSE&G’s investment in transmission grew to $6.7 billion of rate base at the end of 2016, or 44% of the Company’s consolidated rate base of $15.2 billion, at the end of the year.

Electric sales, on a weather-normalized basis, were flat in the reported quarter compared to the year-ago comparable period as an increase in demand from the commercial sector offset a decline in sales to residential and industrial customers. Weather-normalized firm gas sales declined slightly during the fourth quarter compared to the year ago corresponding quarter and declined 1.9% for the full year.

PSE&G invested $2.8 billion during FY16 to upgrade and expand its transmission and distribution system. PSE&G upgraded 177 miles of gas pipes in more than 80 towns as it continues work under its three-year $905 million Gas System Modernization Program.

PSE&G’s net income for FY17 is forecasted at $945 million – $985 million.

PSEG Power

For Q4 2016, PSEG Power reported a net loss of $302 million, or $0.59 per share, versus net income of $149 million, or $0.29 per share, for Q4 2015. For FY16, PSEG Power reported net income of $18 million, or $0.04 per share, versus net income for FY15 of $856 million, or $1.68 per share.

PSEG Power reported non-GAAP operating earnings of $69 million, or $0.13 per share, for Q4 2016 and non-GAAP adjusted EBITDA of $155 million bringing full year non-GAAP operating earnings to $514 million, or $1.01 per share, and non-GAAP adjusted EBITDA to $1.20 billion. A decline in the average price received on energy hedges reduced Power’s quarter-over-quarter non-GAAP operating earnings by $0.05 per share. Output from Power’s generating facilities was 7.6% lower in Q4 2016 compared to year-ago levels. For the year, output was 6.7% lower. The nuclear fleet operated at an average capacity factor of 86.9% producing 29.6 TWh of energy (57% of total energy output for 2016). Power’s gas-fired CCGT fleet operated at an average capacity factor of 57.2% for the year producing 16.4 TWh of energy (32% of 2016’s total energy output). The coal-fired fleet (primarily Keystone and Conemaugh) generated 4.8 TWh of energy during the year (9% of 2016’s total energy output) with the remaining output produced from Power’s peaking generating assets.

For FY17, Power is forecasting output of 49 – 51 TWh – a slight change from 51.5 TWh of energy produced in FY16. Following completion of the Basic Generation Service (BGS) auction in New Jersey in February 2017, Power enters the year with 100% of its 2017 base-load generation hedged. Power has hedged approximately 50% – 55% of its forecast generation in 2018 of 55 TWh at an average price of $43 per MWh.

Power’s non-GAAP operating earnings for FY17 are forecasted to be in the range of $435 million – $510 million.

PSEG Enterprise/Other

PSEG Enterprise/Other reported net income for Q4 2016 of $11 million, or $0.02 per share, compared to net income of $4 million for Q4 2015. For the full year 2016, PSEG Enterprise/Other reported a net loss of $20 million, or $0.04 per share, compared to net income in FY15 of $36 million, or $0.07 per share. Non-GAAP operating earnings for PSEG Enterprise/Other in the reported quarter were $17 million ($0.03 per share) compared to $4 million in the year-ago same quarter. The results for Q4 2016 brought PSEG Enterprise/Other non-GAAP operating earnings for the full year to $72 million, or $0.14 per share, versus $36 million, or $0.07 per share, in 2015.

For 2017, non-GAAP operating earnings for PSEG Enterprise/Other are estimated to be $35 million.

Capital Expenditures

PSEG currently plans to invest approximately $10.2 billion over 2017-2019 primarily in PSE&G (77%) and PSEG Power (23%).

Stock Performance

On Monday, March 13, 2017, the stock closed the trading session at $44.48, slightly rising 0.11% from its previous closing price of $44.43. A total volume of 1.86 million shares have exchanged hands. Public Service Enterprise Group’s stock price advanced 6.29% in the last three months, 10.28% in the past six months, and 4.25% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 2.35%. The stock is trading at a PE ratio of 25.46 and has a dividend yield of 3.87%.

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