Utilities Sector

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• ENN Natural Gas

• Constellation Energy Corporation recently reported its first quarter financial results, reflecting strong performance both operationally and financially.
• The leadership, inclusive of President and CEO Joe Dominguez and CFO Dan Eggers, shared updates that highlight robust strategic progress, complex transactions in the pipeline with technology clients, and the continued financial health of the company including a new $1 billion buyback authorization.
• The results announced include first quarter GAAP earnings of $2.78 per share and adjusted operating earnings of $1.82 per share.

• American Electric Power reported its first quarter earnings for 2024 with a blend of incremental growth and ongoing transformations within its operational and financial frameworks.
• The report outlines the company’s continuing commitment to increasing its capital spend which has included substantial investments into its transmission systems and resilience enhancements, particularly aimed at accommodating the growing demand from commercial sectors such as data centers.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• CMS Energy has reported its Q1 2024 results, showcasing a balanced performance driven by strategic investments, operational efficiencies, and a clear focus on growth.
• The company continues to leverage its CE Way lean operating system, which has been instrumental in enhancing performance, increasing productivity, and managing costs effectively.
• This, coupled with efforts to grow Michigan through economic development, positions CMS Energy as a forward-thinking utility company committed to both customer affordability and long-term sustainability.

• Exelon has demonstrated significant progress on the regulatory front, particularly with the expedited approval of ComEd’s revised revenue requirement by Illinois regulators.
• The company effectively addressed regulatory feedback by filing an updated grid plan, underscoring its proactive engagement with stakeholders to foster compliance and promote grid modernization.
• Such developments are poised to enhance long-term value creation through improved utility infrastructure and adherence to clean-energy mandates.

• Based on the close of 22 July, there could be two changes for the iShares A50 China (2823 HK) / CSOP China A50 (2822 HK) ETFs in June.
• China National Nuclear Power and Huaneng Lancang River Hydropower could replace China Tourism Group Duty Free Corp Ltd and Yihai Kerry Arawana Holdings in the ETFs. 
• China Tourism Group Duty Free (1880 HK) could be deleted from a global index in August, so there could be selling in the A-shares and H-shares.

• NRG Energy, Inc. recently reported a strong start to 2024, with business performance exceeding expectations and an affirmation of the 2024 financial guidance.
• Management highlighted transformative trends in power demand, primarily driven by electrification, generative AI, and data center growth, which open promising prospects for the power sector.
• Furthermore, NRG is strategically positioned to benefit from tightening supply and demand dynamics in key markets, leveraging its diversified generation portfolio and consumer technology platform.

• Brookfield Renewable reported mixed results in its fourth quarter 2023 earnings, presenting both challenges and advancements in its operational and financial strategies.
• The company, a leader in renewable energy solutions, demonstrated robust operational success by increasing its funds from operations, driven primarily by organic growth and strategic acquisitions.
• Notably, the deployment of $9 billion into diverse opportunities highlights Brookfield Renewable’s aggressive capital investment strategy, aiming to enhance its global footprint in the renewable sector.

• AGR minority-squeeze out arbitrage presents a profitable opportunity for arbitrage investors
• Buffett’s endorsement of arbitrage as a cash management strategy adds credibility to potential returns
• Current premium AGR is trading at indicates confidence in a higher offer, making it an attractive short-term investment opportunity for higher returns

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• AES Corporation held a financial review for the first quarter of 2024, wherein they discussed the company’s performance and future plans extensively.
• The company announced adjusted EBITDA with tax attributes of $863 million, adjusted EBITDA of $635 million, and adjusted earnings per share (EPS) at $0.50.
• These results show AES Corporation’s ability to meet its targeted outcomes and reflect resilience amidst prevailing economic conditions like high interest rates and inflation.

• Essential Utilities has reported a robust first quarter for 2024.
• The company, during this period, achieved GAAP earnings of $0.97 per share, benefiting significantly from the gain on sale resulting from the closure of energy projects earlier in January.
• Despite the warmer weather impacting the demand for its gas utility, Essential Utilities has shown strong operational performance across both its Gas and Water sectors.

• Evergy, Inc. reported its financial results for the first quarter of 2024, indicating a mix of strengths and challenges impacting its performance.
• The company delivered adjusted earnings of $0.54 per share, down from $0.59 per share in the same period the previous year.
• This reduction in earnings per share can be attributed largely to increased costs, including higher operations and maintenance expenses, depreciation and amortization expenses, and interest expenses.

• Atmos Energy Corporation has presented a robust fiscal performance for the second quarter of 2024, showing notable advancements and developments across various segments.
• The company reported a year-to-date net income of $743 million, translating to earnings per share of $4.93, with an updated guidance range of $6.70 to $6.80 for the fiscal year.
• These figures represent a performance uptick and reflect the ongoing efforts of Atmos Energy to modernize and expand its services.

• The Gulf Energy (GULF TB)/Intouch (INTUCH TB) merger is an opportunistic, bullying method designed to have GULF shareholders buy INTUCH and therefore AIS (ADVANC TB) at too low a price. 
• CK Infrastructure Holdings (1038 HK)‘s interest in a possible London listing coincides with the LSE undergoing a listing regime change.
• Management continue to creep their stake in Zhongsheng Group (881 HK), and now hold a shade under 50%. 

• IDACORP’s first quarter 2024 performance manifests a mixed financial landscape, characterized by both challenges and strategic advancements in its operational and regulatory domains.
• The company reported a decline in diluted earnings per share from $1.11 in the first quarter of the previous year to $0.95 in the current reporting period.
• This decrease is attributed primarily to milder weather which lowered energy consumption, and heightened operational and maintenance costs driven by increases in wildfire mitigation expenses and labor.

• Ormat Technologies showcased robust results in the first quarter of 2024, reflecting significant financial and operational progress.
• The company, which operates across electricity, product, and energy storage segments, reported a 21% increase in total revenues and a 25.5% rise in earnings per diluted share year-over-year.
• The adjusted EBITDA also increased by 14.4%, fueled by organic growth, efficiency improvements at operational facilities, and contributions from newly acquired assets from Enel Green Power North America.

• Alliant Energy has begun 2024 with a balance of strategic advancements and challenges, as outlined in their most recent performance and strategy update.
• The company has made notable progress in expanding its renewable energy capacity, particularly in solar power.
• Their completion of a significant 1.1 gigawatts of solar investment in Wisconsin and advances in Iowa’s solar projects demonstrate a solid commitment to reducing dependency on non-renewable energy sources.

• Equity ETF flows in China continued to lead Asia as the “National Team” in China supports market levels during the 3rd Plenum.
• CK Infrastructure Holdings (1038 HK) , Genscript Biotech (1548 HK) and BOC Aviation (2588 HK) saw positive news sentiment and share price movements for the week.
• Jiumaojiu (9922 HK) , Aluminum Corporation Of China (2600 HK) and China Hongqiao (1378 HK) saw negative news sentiment and share price drops for the week.

• Edison International has demonstrated a solid start to the year in its first quarter 2024 results, showcasing both strengths and areas of cautious consideration.
• The company reported a core EPS of $1.13 and reaffirmed its 2024 core EPS guidance range of $4.70 to $5.05.
• This performance reflects the company’s robust operational strategy and ongoing investments in infrastructure and safety measures, particularly in response to the persistent threat of wildfires in its service areas.

• National Grid PLC recently reported substantial developments in its Full Year Results Presentation, signaling a transformative phase with aggressive capital investment plans, strategic priorities, and updates related to its financial framework.
• This presentation highlighted various aspects, ranging from financial outcomes to operational updates and strategic initiatives aimed at solidifying the company’s role as a predominant player in network energy distribution.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• New Jersey Resources recently disclosed its second-quarter results, affirming the company’s continuing momentum in fiscal 2024.
• Key highlights include net financial earnings (NFE) of $1.41 per share, with a reaffirmed NFEPS guidance range of $2.85 to $3 for the fiscal year.
• This outperformance is primarily due to robust contributions from the Energy Services segment and solid earnings from its core business segments, portraying a strong financial posture.

• NiSource, in its Q1 2024 investor update, provided an exhaustive look into their operational and financial dynamics, reinforcing their strategic route toward realizing significant growth through diligent initiatives and regulatory alignments.
• The company marked the period with a robust financial upswing, posting a first-quarter 2024 adjusted earnings per share (EPS) of $0.85— showcasing a 10% rise from the previous year’s $0.77.
• Such fruitful results were buoyed by contributions from regulatory activities and other income sectors while being slightly offset by escalated operations and maintenance (O&M) and depreciation costs.

• OGE Energy Corp. reported solid first-quarter earnings for 2024, affirming its strong positioning and operational reliability despite facing a competitive and dynamic business environment.
• As outlined in the update, the company delivered consolidated earnings of $0.09 per share, encompassing $0.12 per share from OG&E and a holding company loss of $0.03 per share.
• This start to the year aligns well with annual projections, setting a confident tone for the following quarters.

• ONE Gas Inc. reported a solid first quarter of 2024, navigating through economic headwinds, including warm weather conditions, elevated interest rates, and persistent inflationary pressures.
• Notably, the company’s proactive measures to manage operating and maintenance (O&M) expenses and strategic in-house functions have paid off, helping it remain on track to meet the midpoint of its 2024 financial guidance.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Dalrymple Finance report examines financial structure of Brookfield Infrastructure Partners managed by Brookfield Asset Management
• Report raises concerns about fee maximization practices that may not align with interests of limited partners
• Comparison with sister entity launched in 2023 highlights flaws in BIP’s financial policies, suggesting a unsustainable pyramid scheme structure

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• American Water started 2023 with promising financial results, as its earnings per share (EPS) rose from $0.91 to $0.95 compared to the same quarter last year.
• This increase was anticipated, aligning with the company’s forecast and sustaining its full-year earnings guidance.
• Noteworthy contributing factors include the $0.02 per share rise stemming from additional interest income, linked to amendments in the seller note related to the HOS sale.

• Entergy Corporation has shown a mix of achievements and challenges in its First Quarter 2024 results.
• Although the company reported adjusted earnings per share of $1.08, which fell below expectations, its management remains optimistic about meeting annual financial goals citing a solid track record in managing operational expenses.
• Several positive developments were noted, including recognition for customer engagement and the execution of eight electric service agreements with industrial customers.

• Dominion Energy delivered mixed results in the first quarter of 2024, showcasing both resilience and areas needing improvement as it strives to meet its future financial and operational goals.
• The company reported first quarter operating earnings of $0.55 per share, affected by a $0.06 headwind from adverse weather conditions.
• However, the sale of East Ohio Gas Company and various operational management (O&M) timings provided some financial relief.

• Sempra’s first quarter of 2024 results showcases a strong start to the year, affirming its robust financial health and diligent strategic execution across its various segments.
• This report, reflecting on certain financial and strategic developments, delves into both the achievements and the areas of persistent challenge within the company, thereby providing a comprehensive overview for potential investors.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Xcel Energy recently held a discussion regarding their first quarter earnings for 2024, where they announced an increased earnings per share compared to the prior year.
• During the quarter, the company experienced various operational challenges and opportunities, extensively detailed in their public statements.
• Xcel Energy continues to emphasize its commitment towards enhancing system resiliency, particularly against wildfire risks, and advancing its clean energy initiatives.

• Public Service Enterprise Group reported its first-quarter earnings for 2024, showcasing results that align closely with its annual fiscal projections.
• The organization aims to maintain its non-GAAP operating earnings guidance of $3.60 to $3.70 per share and anticipates a growth rate between 5% to 7% through 2028.
• This growth is premised on sizable infrastructure and energy efficiency investments designed to support the electrification of various sectors and a move towards reduced greenhouse gas emissions.

• Duke Energy has delivered robust first-quarter 2024 results, underpinned by various strategic implementations and operational efficiencies.
• With a first-quarter adjusted earnings per share of $1.44, the company outperformed its previous year’s results by $0.24.
• This financial improvement is primarily attributed to growth from rate reforms across various jurisdictions, increased retail volumes, and favorable weather conditions.

• CenterPoint Energy has published its first-quarter results for 2024, showing significant resilience and strategic maneuvering despite prevailing challenges.
• The company achieved non-GAAP EPS of $0.55, successfully earning over one-third of its full-year earnings projection at the midpoint.
• This result underscores its projected annual EPS growth of 8%, aligning with its strategic plan to bolster shareholder value consistently.

• DTE Energy presented its first quarter 2024 financial results, showing a robust start to the year.
• The energy company, well-entrenched with a solid foundation, reported operating earnings of $346 million, translating to $1.67 per share.
• Despite facing milder winter weather which affected demand, DTE Energy demonstrated financial resilience.

• Intouch Holdings (INTUCH TB) and Gulf Energy Development (GULF TB) announced restructuring transactions to merge into NewCo and VTOs for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB). 
• Shareholders will receive 1.69335 NewCo shares per Intouch share (excluding shares held by Gulf) and 1.02974 NewCo shares per Gulf share.
• The key conditions are shareholder approvals, completion of VTOs and purchase of dissenting shares. The transaction is long-dated and expected to be completed in 2Q25.

• CK Infrastructure Holdings (1038 HK), 75.67%-held by CK Hutchison Holdings (1 HK), announced it is considering a second listing on an overseas stock exchange, such as London.
• A UK-listing makes perfect sense. In excess of 90% of CKI’s FY23 profit was sourced from businesses outside Asia, with ~50% from its UK ops.
• The wording in the announcement is unclear – a dual primary listing, or a secondary listing? The LSE is also undergoing a listing regime change, effective 29th July.

• Barito Pacific (BRPT IJ)‘s 64.7% stake in Barito Renewables Energy (BREN IJ) (now Indonesia’s largest company by market cap), is worth 8x its market cap. That’s unsustainable.
• Preceding my comments on the Barito complex are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.