CenterPoint’s Profits Fall Short Of Expectations, Still On Target For Full-Year Guidance

CenterPoint Energy Inc.’s second quarter earnings fell short of expectations, but still remains on schedule to hit its full-year profit goals, the Houston-based utility operator announced on Monday.

For the period ended June 30, 2015, CenterPoint reported net income of $77 million, or 18 cents per share, down 28% compared to $107 million, or 25 cents a year ago. Total revenues for the quarter fell nearly 19% to $1.53 billion from nearly $1.88 billion a year ago.

Wall Street had expected the Houston-based utility and natural gas distributor to report second quarter earnings of 19 cents per share on revenue of $1.97 billion, according to Thomson Reuters.

“We remain focused on investing in infrastructure to meet the needs of our growing customer base. Our utilities delivered strong financial results, and we continue to seek timely recovery of our investments,” said CenterPoint Energy CEO Scott M. Prochazka.

CenterPoint is the largest natural gas utility in Arkansas with more 430,000 residential, commercial and industrial customers across the state. In late April, the Houston-based energy giant made a rate adjustment due to lower natural gas prices at the wellhead that lowers monthly bills for Arkansas consumers by more than 14%.

That means an August residential gas bill using 50 Ccf (hundred cubic feet) would amount to about $55.92, compared to $65.48 in April.

Here are some additional highlights of CenterPoint’s second quarter results:

· The electric transmission & distribution segment reported operating income of $158 million for the second quarter of 2015, consisting of $131 million from the regulated electric transmission & distribution utility operations (TDU) and $27 million related to securitization bonds.
· The natural gas distribution segment reported operating income of $19 million for the second quarter of 2015, compared with $30 million for the same period of 2014.
· The energy services segment reported operating income of $9 million for the second quarter of 2015, which included a mark-to-market accounting gain of $2 million, compared with $11 million for the same period of 2014, which included a mark-to-market accounting gain of $6 million.
· The midstream investments segment reported $43 million of equity income for the second quarter of 2015, compared with $71 million in the same quarter of the prior year.

CenterPoint is targeting four to six percent per share growth on a guidance basis through 2018, inclusive of midstream investments, and anticipates dividend growth to be in line with earnings growth.

The Texas natural gas utility also reaffirmed its earnings estimate for 2015 utility operations in the 71 cents and 75 cents per diluted share range. Companywide, CenterPoint reiterated its full-year earnings guidance of $1.00 to $1.10 per share.

At the close of business Monday, CenterPoint shares were up more than 2%, or 39 cents at $19.53. The company’s shares have traded in the range of $18.20 and $25.56 over the past year.