Xcel Energy Inc (NYSE:XEL) announced its results for the most recent quarter on August 2, 2012. Xcel Energy is a holding company that is engaged in the generation, purchase, transmission, distribution and sale of electricity and natural gas.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: Surprising Earnings Results

The Numbers: Xcel Energy managed to beat EPS estimates, though the company's revenues failed to top expectations. The company reported 38 cents per share versus the 35 cents per share estimate and revenues of $2.27 billion versus the $2.72 billion estimate. EPS rose 15.2% while revenue declined 6.7% from the same period last year. Revenue declined last quarter after shrinking 8.5% to $2.58 billion in the first quarter. For the second quarter, the company reported profit of $183.1 million. This is 15.3% higher than the year-ago quarter.

Management Quote: "I am pleased to report strong second quarter earnings," said Ben Fowke, Chairman, President and Chief Executive Officer. "Warmer weather combined with operating and maintenance cost management initiatives allowed us to mitigate the negative impact of regulatory decisions, including the Minnesota Commission's denial of our request to defer incremental property taxes in 2012." "As a result, we continue to expect 2012 earnings per share to be in the lower half of our $1.75 to $1.85 guidance range."

A Look Back: Net income has increased 6.1% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 15.3% from the year-earlier quarter.

Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. The average estimate for the fiscal year has remained at $1.78 per share.

Filed Under: ,
Tickers in this Article: XEL

comments powered by Disqus

Trading Center