Summary
Eversource Energy (ES), operating as Northeast Utilities and subsidiaries (NU), reported a decrease in net income attributable to controlling interests to $99.3 million for the first quarter of 2012, down from $114.2 million in the same period of 2011. This decline was primarily attributed to milder weather conditions compared to the prior year, leading to lower energy sales, and increased pension and employee-related costs. Despite the year-over-year earnings decrease, the company highlighted significant progress on its merger with NSTAR, which was completed on April 10, 2012, creating a larger, integrated energy delivery company serving approximately 3.5 million customers across Connecticut, Massachusetts, and New Hampshire. The company also made substantial investments in infrastructure, with total capital expenditures increasing to $304.3 million. Liquidity remains adequate, with cash and cash equivalents significantly increasing to $283.4 million by the end of the quarter. Key regulatory developments include settlement agreements in Massachusetts and Connecticut regarding the NSTAR merger and ongoing proceedings with the FERC concerning transmission ROE. Financially, the company saw a notable increase in cash and cash equivalents, improved liquidity, and continued investment in regulated utility assets. The completion of the NSTAR merger marks a significant strategic milestone, positioning the combined entity for future growth and operational efficiencies. Investors should monitor the integration of NSTAR and the impact of ongoing regulatory proceedings, particularly the FERC transmission ROE complaint, which could affect future earnings.
Financial Highlights
44 data points| Revenue | $1.10B |
| Operating Expenses | $885.23M |
| Operating Income | $214.40M |
| Interest Expense | $66.45M |
| Net Income | $100.80M |
| EPS (Basic) | $0.56 |
| Shares Outstanding (Basic) | 178.06M |
| Shares Outstanding (Diluted) | 178.44M |
Key Highlights
- 1Net income attributable to controlling interests decreased to $99.3 million ($0.56/share) for Q1 2012 from $114.2 million ($0.64/share) in Q1 2011, primarily due to milder weather and higher pension costs.
- 2The merger with NSTAR was completed on April 10, 2012, creating a larger energy delivery company. NSTAR's results will be reflected starting in Q2 2012.
- 3Total capital expenditures increased to $304.3 million in Q1 2012, up from $236.7 million in Q1 2011, driven by investments in transmission infrastructure, including the GSRP project.
- 4Cash and cash equivalents significantly increased to $283.4 million as of March 31, 2012, up from $6.6 million at the end of 2011.
- 5Operating revenues decreased by 11.0% to $1,099.6 million, mainly due to lower electric and natural gas sales driven by warmer weather and a decrease in fuel, purchased, and net interchange power costs.
- 6The company is actively managing market risks through derivative instruments, with regulatory assets and liabilities established for changes in fair value of derivatives related to regulated operations.
- 7The FERC has established hearing and settlement procedures for a complaint alleging that the base ROE for transmission service is unjust and unreasonable, with a potential decision by Q3 2013.