Pepco Holdings Q4 Profit Declines, But Tops View

(RTTNews) - Electric and natural gas utility company Pepco Holdings, Inc. (POM) reported Friday a profit for the fourth quarter that declined from last year, despite revenue growth, hurt by higher impairment charges and higher operating expenses.

However, adjusted earnings per share from continuing operations topped analysts' expectations. The company also said it will not be providing earnings guidance for the full-year 2015, due to the pending merger with Exelon Corp. (EXC).

The Washington, DC-based company, one of the largest energy delivery companies in the Mid-Atlantic region, reported a net income of $35 million or $0.14 per share for the fourth quarter, higher than $58 million or $0.23 per share in the prior-year quarter.

Excluding items, adjusted earnings from continuing operations for the quarter was $59 million or $0.23 per share, compared to $61 million or $0.24 per share in the year-ago quarter.

On average, seven analysts polled by Thomson Reuters expected the company to post earnings of $0.20 per share for the quarter. Analysts' estimate typically excludes one-time items.

Total operating revenues for the quarter grew to $1.12 billion from $1.09 billion in the same quarter last year. Analysts expected revenues of $1.17 billion.

Total electric operating revenue grew to $1.0 billion from $990 million in the year-ago quarter.

The company's power delivery electric sales for the quarter grew to 10,996 gigawatt hours or GWh, from last year's 11,085 GWh. Weather-adjusted electric sales were 11,079 GWh, compared to last year's 11,013 GWh.

Operating income for the quarter was $114 million, lower than $155 million in the prior-year quarter, as total expenses increased to $1.0 billion from $936 million in the prior-year quarter.

Pepco Holdings noted that it will not be providing earnings guidance for 2015, due to the pending merger with Exelon, which agreed in April to buy Pepco for $27.25 per share, implying a deal value of about $6.8 billion. The companies currently expect to complete the merger in the second or third quarter of 2015.

"We are pleased with our progress to date and work continues with Exelon on obtaining the remaining state regulatory approvals. Looking ahead, we remain confident that our pending merger with Exelon will provide significant stakeholder benefits, including enhancing our ability to achieve our fundamental strategy of providing our customers with safe and reliable service," Chairman, President and CEO Joseph Rigby said in a statement.

POM closed Thursday's regular trading session at $27.16, down $0.01 on a volume of 0.58 million shares.