Yahoo Finance How Will Pacific Gas and Electric Finish Fiscal 2015?
Will Pacific Gas and Electric Meet 4Q15 Earnings Guidance?
Management guidance
Pacific Gas and Electric (PCG) is going to announce its fourth quarter results on February 18, 2016. Management has already provided full-year earnings guidance in the range of $3.0 to $3.10 for 2015. In the first nine months of 2015, PCG earned $2.62 per share. This implies that earnings of $0.44 per share in 4Q15 would meet PCG’s guidance for full-year earnings. In 4Q14, it earned $0.53 per share.
PCG’s performance drivers
PCG’s 4Q15 earnings may see a positive impact from the approval of its transmission owner rate case. Federal regulators approved PCG’s $1.2 billion rate case, which is an increase of $161 million from its previous transmission rate case. Improved rates came into effect in October 2015.
PCG’s operational territories experienced much of the same temperature patterns in 4Q15 as in 4Q14. PCG operates in California where utilities like Sempra Energy (SRE) and Edison International (EIX) also have a significant presence.
Some relief in the San Bruno case
In December 2015, PCG management heaved a sigh of relief as a federal judge reduced its penalty in its San Bruno case. The San Francisco judge reduced the penalty from $1.1 billion to $562 million over the natural gas (UNG) pipeline explosion that took place in 2010.
There are 27 criminal charges against PCG over the accident that killed eight people and injured many. California Public Utilities (XLU) Commission has imposed a $1.6 billion penalty in a separate state administrative case for the accident. Regulators held PCG responsible for the explosion due to its irresponsible pipeline operations. The incident severely dented the utility’s reputation.
Browse this series on Market Realist:
