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Great Plains Energy (GXP) Q2 Earnings Miss, Revenues Up Y/Y


Great Plains Energy GXP reported second-quarter 2017 operating earnings of 43 cents per share, lagging the Zacks Consensus Estimate of 47 cents by 8.5%.

Operating earnings also decreased 21.8% from 55 cents a year ago. The year-over-year decrease is primarily due to cool weather, lower throughput disincentive from energy efficiency programs and higher depreciation.

GAAP loss was 10 cents per share against earnings of 20 cents in the year-ago quarter. The difference between GAAP loss and operating earnings in second quarter was due to some one-time tax adjustments and Mark-to-market impacts of interest rate swaps.

Great Plains Energy Inc Price, Consensus and EPS Surprise

Great Plains Energy Inc Price, Consensus and EPS Surprise | Great Plains Energy Inc Quote

Total Revenue

The company’s total revenue came in at $682.6 million, beating the year-ago quarter tally of $670.8 million by 1.8%.

The retail MWh sales were down 1.8% in the second quarter from the year-ago period, primarily due to cooler weather, which lowered demand for utility services.

Highlights of the Release

Total operating expenses increased 3.6% year over year to $506.1 million, primarily due to a surge in fuel and purchased power prices and transmission expenses.

Interest and related charges in the reported quarter were $145.3 million, up 9.3% from the year-ago quarter.

Financial Update

Great Plains Energy exited the second quarter with cash and cash equivalents of $6 million, up from $4.5 million as of Dec 31 2016.

Long-term debt as of Jun 30, 2017 was $2,231.6 million compared with $2,284.0 million at the end of 2016.

Cash from operating activities in the first half of 2017 was $281.6 million, down 5.1% from $296.6 million in the year-ago period.

Merger Update

Great Plains Energy entered into an Agreement and Plan of Merger with Westar Energy Inc. WR. The amended and restated merger agreement is pending for approval with the regulatory authority.

Post completion of the anticipated merger, Westar shareholders will own nearly 52.5% and Great Plains Energy shareholders will own around 47.5% of the combined company.

Performance of the Peers

Other operators in the industry like Dominion Energy D, and NextEra Energy Inc. NEE surpassed their respective Zacks Consensus Estimate in second-quarter earnings.

Zacks Rank

Great Plains Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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