Bt William Trent, CFA of Stock Market Beat
It just goes to show – given a mild enough winter even stable utilities can fall short. Case in point: Small Cap Watch List member Energy East (EAS):
Earnings per share basic for the 12 months ended December 31, 2006, were $1.77 while earnings per share for the quarter ended December 31, 2006, were 53 cents.Earnings per share basic for the 12 months ended December 31, 2006, increased 2 cents as compared to earnings per share for the 12 months ended December 31, 2005 of $1.75. The increase in earnings per share was primarily due to higher margins on electric sales of 18 cents and 7 cents from a lower effective income tax rate and differences in the 2005 filed tax return compared to the 2005 book tax expense. Earnings per share also increased by 5 cents due to a write-off in the fourth quarter of 2005 related to the termination of operations of the South Glens Falls generating facility. These increases were partially offset by higher storm related repair costs of 11 cents, higher bad debt expense of 7 cents and 5 cents for the write-off of unamortized issuance costs resulting from the redemption of our trust preferred securities in July.
Consensus estimates called for $1.46 billion in revenue and $0.56 in EPS for the quarter. If global warming is for real they may actually be in trouble. However, with a median analyst rating of “Underperform” and a 4.7% dividend yield, it will probably be easier for the company to exceed expectations than to truly disappoint.
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