Xcel Energy, Inc. :XEL-US: Earnings Analysis: Q4, 2016 By the Numbers : February 6, 2017

Xcel Energy, Inc. reports financial results for the quarter ended December 31, 2016.

We analyze the earnings along side the following peers of Xcel Energy, Inc. – WEC Energy Group Inc, PPL Corporation and CMS Energy Corporation (WEC-US, PPL-US and CMS-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 2,794.65 million, Net Earnings of USD 227.48 million.
  • Gross margins widened from 21.29% to 21.34% compared to the same period last year, operating (EBITDA) margins now 28.54% from 29.01%.
  • Earnings growth due to contribution of one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 2794.65 3038.37 2499.37 2771.29 2645.82
Revenue Growth (%YOY) 5.63 4.6 -0.45 -6.32 -9.66
Earnings (mil) 227.48 457.8 196.8 241.31 209.03
Earnings Growth (%YOY) 8.83 7.35 -0.07 58.69 6.46
Net Margin (%) 8.14 15.07 7.87 8.71 7.9
EPS 0.45 0.9 0.39 0.47 0.41
Return on Equity (%) 8.28 16.88 7.37 9.08 7.91
Return on Assets (%) 2.26 4.59 2 2.47 2.17

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Market Share Versus Profits

Revenues History
Earnings History

XEL-US‘s change in revenue this period compared to the same period last year of 5.63% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that XEL-US is holding onto its market share. Also, for comparison purposes, revenues changed by -8.02% and earnings by -50.31% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings growth has been influenced by the year-on-year improvement in gross margins from 21.29% to 21.34%. However the company’s overhead costs have prevented it from fully capitalizing on these gross margin improvements. In fact, the company’s operating margins (EBITDA margins) showed no improvement over the same period last year.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Margins

The company’s operating (EBIT) margins contracted from 16.67% to 16.65%. In spite of this, the company’s earnings rose. This was influenced primarily by one-time items, which improved pretax margins from 12.07% to 12.07%.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Xcel Energy, Inc.

Company Profile

Xcel Energy, Inc. operates as a holding company, which engages in the generation, purchase, transmission, distribution and sale of electricity and natural gas business through its subsidiaries. It operates through the following segments: Regulated Electric Utility, Regulated Natural Gas Utility and All Others. The Regulated Electric Utility segment generates, transmits and distributes electricity primarily in portions of Minnesota, Wisconsin, Michigan, North Dakota, South Dakota, Colorado, Texas and New Mexico. In addition, this segment includes sales for resale and provides wholesale transmission service to various entities in the United States. It also includes commodity trading operations. The Regulated Natural Gas Utility segment transports, stores, and distributes natural gas primarily in portions of Minnesota, Wisconsin, North Dakota, Michigan and Colorado. The All Others segment primarily includes steam, appliance repair services, nonutility real estate activities, processing solid waste into refuse-derived fuel and investments in rental housing projects that qualify for low-income housing tax credits. The company was founded in 1909 and is headquartered in Minneapolis, MN.

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