IdaCorp Beats on Q4 Earnings

Zacks Equity Research

IdaCorp, Inc. (IDA) reported fourth quarter 2013 earnings of 55 cents per share, outpacing the Zacks Consensus Estimate of 49 cents by 12.2% and increasing 52.8% from the comparable year-ago period.

2013 earnings were $3.64 per share, beating the Zacks Consensus Estimate by 4.3% and increasing 5.2% from 2012. Full-year rate adjustment from the Langley Gulch plant and change in accounting practice contributed to the growth in earnings.

Highlights of the Release

IdaCorp’s total operating revenue in 2013 was $1.2 billion, which exceeded the year-ago figure by 15.3%. The upswing can be attributed to higher sales led by favorable weather and customer growth.

Operating income for the year was $291.7 million as against $242.6 million in 2012.

Cash flow from operations for 2013 was reported at $305.5 million compared with $249.3 million in 2012.

Long-term debt for 2013 totaled $1.6 billion compared with $1.5 billion in 2012.

IdaCorp currently has a credit facility of $125.0 million while its primary subsidiary Idaho Power has a credit facility of $300.0 million for meeting liquidity and operating requirements arising in the short term.

The company has recently adopted a change in its accounting method for investments in qualified affordable housing projects. This change is effective retrospectively and has led to an increase of $4.3 million in IdaCorp’s net income for 2012 and $5.1 million for 2013.

2014 Guidance

IdaCorp’s 2014 earnings expectation is in the range of $3.40 to $3.55 per share. While the 2013 number at $3.64 was even higher than the high end of the guided range for 2014, the Zacks Consensus Estimate of $3.42 is on the lower end.

The company expects capital expenditure for 2014 in the range of $280.0–$295.0 million, higher than the $228.0 million reported in 2013.

Guidance for operating & maintenance expenses was provided in the range of $335.0–$345.0 million.

IdaCorp expects its total hydroelectric generation to be within 5–7 million megawatt-hours (MWh).

Our Take

Expectation of growth in gross area product in Idaho Power’s service area along with the company’s favorable expansion options in that area hints towards a growth in business activities going forward. In addition, IdaCorp’s increasing customer count and anticipated growth in residential loads could be a contributing factor.

Zacks Rank

IdaCorp currently has a Zacks Rank #3 (Hold). However, better-ranked stocks in the Electric Utilities industry that can be considered are Black Hills Corp. (BKH), DTE Energy Co. (DTE) and CMS Energy Corp. (CMS). All these stocks carry a Zacks Rank #2 (Buy).

Read the Full Research Report on IDA
Read the Full Research Report on CMS
Read the Full Research Report on DTE
Read the Full Research Report on BKH

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