Unitil Beats Q4 Earnings Ests, Misses Rev

Zacks Equity Research
January 31, 2014

Unitil Corporation (UTL) reported fourth-quarter 2013 earnings of 75 cents per share, surpassing the Zacks Consensus Estimate by 9 cents. Quarterly earnings jumped 13.6% year over year on the heels of higher natural gas and electricity sales margins. The positives were partially offset by increased utility operating costs.

For 2013, Unitil reported earnings of $1.57 per share compared with $1.43 per share in 2012.

Operational Highlights

In the fourth quarter, Unitil Corporation posted total operating revenues of $109.8 million, missing the Zacks Consensus Estimate by $0.2 million. Quarterly revenues however climbed 11.1% year over year due to a 13.2% rise in the company’s Electric segment sales and a 9.7% rise in the company’s Gas segment revenues. Unitil Corporation’s Other segment reported flat revenues year over year.

In 2013, operating revenue was $366.9 million, up almost 4.0% year over year.

Operation and maintenance expenses increased 0.3% and depreciation, amortization, taxes & other expenses climbed 1.5% in the quarter year over year.

Total electricity sales volume was up 0.1% year over year to 387.1 million kilowatt-hours due to a rise in residential consumption, partly offset by a fall in commercial consumption.

Total gas sales volume increased 11.2% to 53.7 million therm from 48.3 million therm a year ago. The improvement in sales was primarily driven by a rise in commercial/industrial gas sales and a higher customer count.

Financial Update

Unitil Corporation’s cash and cash equivalents as of Dec 31, 2013, were $9.4 million versus $9.8 million as of Dec 31, 2012.

Long-term debt (less current portion) as of Dec 31, 2013, was $284.8 million compared with $287.3 million as of Dec 31, 2012.

During 2013, cash provided by operating activities was $96.3 million versus $66.7 million in the previous year.

The company invested $89.5 million during 2013 under its capital spending program.

Dividend Update

At the earnings call, Unitil Corporation announced that it will pay a regular quarterly dividend of 34.5 cents per share on the company’s common stock. On an annualized basis, the dividend rate stands at $1.38 per share.

Peer Comparison

American Electric Power Company Inc. (AEP) reported fourth-quarter 2013 operating earnings of 60 cents per share, beating the Zacks Consensus Estimate of 56 cents by 7.1%. The quarterly figure also improved 20% from the year-ago profit of 50 cents.

Zacks Rank

Unitil Corporation currently has a Zacks Rank #4 (Sell). However, other stocks from the industry that are worth considering include NRG Yield, Inc. (NYLD) and National Grid plc (NGG), each with a Zacks Rank #1 (Strong Buy).

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