OGE Energy (OGE) Q2 Earnings Surpass Estimates, Down Y/Y

OGE Energy Corp.’s OGE second-quarter 2019 earnings of 50 cents per share outpaced the Zacks Consensus Estimate of 48 cents by 4.2%. The bottom line, however, declined 9% from 55 cents registered in the year-ago quarter. This downturn can be primarily attributed to the company’s dismal top-line performance in the reported quarter.

Revenues

OGE Energy’s operating revenues of $513.7 million declined 9.4% from $567 million in the prior-year quarter. The downside was primarily due to year-over-year lower residential, commercial, industrial, public authorities and street light as well as system sales revenues.

OGE Energy Corporation Price, Consensus and EPS Surprise

OGE Energy Corporation Price, Consensus and EPS Surprise

OGE Energy Corporation price-consensus-eps-surprise-chart | OGE Energy Corporation Quote

Operational Highlights

Total sales in the reported quarter amounted to 6.9 million megawatt-hours (MWh), lower than 7.4 million MWh in the prior-year quarter. Meanwhile, the company’s customer count inched up 1% to 853,500.

Cost of sales summed $178.7 million compared with $208.7 million in the prior-year quarter.

Total operating expenses rose 2% year over year to $225 million on account of higher operation and maintenance expenses as well as depreciation and amortization expense.

Consequently, operating income decreased 20.1% to $110 million from the year-ago quarter’s $137.7 million.

Interest expenses totaled $35.9 million in the second quarter, down from $40.9 million a year ago.

Other Highlights

OGE Energy reported net income of $100 million in the second quarter, down from the prior-year figure of $111 million.

OG&E: The segment’s net income declined 18.5% to $75 million from $92 million registered in the prior-year quarter.

Natural Gas Midstream Operations: The segment posted second-quarter net income of $27 million compared with $22 million in the prior year.

Guidance

OGE Energy reiterated its 2019 earnings guidance. The company still expects its earnings to be in the $2.05-$2.20 per share range. The Zacks Consensus Estimate for full-year earnings is pegged at $2.14, just above the mid-point of the company’s projected range.

Zacks Rank

OGE Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

American Electric Power Co., Inc. AEP reported second-quarter 2019 adjusted earnings of $1.00 per share, which outpaced the Zacks Consensus Estimate of 98 cents by 2%.

NextEra Energy’s NEE second-quarter 2019 adjusted earnings came in at $2.35 per share, beating the Zacks Consensus Estimate of $2.28 by 3.1%. The bottom line also increased 12.9% on a year-over-year basis.

CMS Energy Corporation CMS reported second-quarter 2019 adjusted earnings per share of 33 cents, down 32.7% year over year. The bottom line also missed the Zacks Consensus Estimate of 44 cents by 25%.

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