Pinnacle West Capital Earnings: Revenue Grows After Four Straight Declines, Net Income Rises

S&P 500 (NYSE:SPY) component Pinnacle West Capital Corporation (NYSE:PNW) reported net income above Wall Street’s expectations for the second quarter. Pinnacle West Capital, through its subsidiaries, provides retail and wholesale electric services.

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Pinnacle West Capital Corporation Earnings Cheat Sheet

Results: Net income for Pinnacle West Capital Corporation rose to $122.3 million ($1.11 per share) vs. $86.7 million (79 cents per share) in the same quarter a year earlier. This marks a rise of 41.1% from the year-earlier quarter.

Revenue: Rose 9.8% to $878.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pinnacle West Capital Corporation beat the mean analyst estimate of $1 per share. It beat the average revenue estimate of $666.3 million.

Quoting Management: “Temperatures well above normal during the quarter – combined with temperatures significantly below historical averages a year ago – positively impacted our second-quarter results,” said Pinnacle West Chairman, President and Chief Executive Officer Don Brandt. “The quarter-over-quarter swing in weather produced an 8.1 percent increase in retail electricity sales over the same period a year ago as people used their air-conditioners more to combat the early summer heat. Looking forward, we continue to create value by achieving operational excellence, investing in Arizona’s sustainable energy future, and remaining focused on disciplined cost-management. Sticking with this approach provides us the opportunity to maintain high levels of reliability and customer satisfaction, while achieving our financial goals for investors through the duration of the four-year base-rate stay-out period agreed to in our 2012 retail regulatory settlement.”

Key Stats:

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the first quarter, which saw a 5.9% decrease.

The company beat estimates last quarter after meeting expectations in the first quarter with a loss of 7 cents per share.

After sitting in the red the quarter before, the company reported a profit last quarter. The company booked a net loss of $12.6 million, or 11 cents per share, in the fourth quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from $2.31 a share to $2.34 over the last ninety days. The average estimate for the fiscal year has seen a bump from $3.35 per share sixty days ago to $3.37.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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