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PPL’s ​​Q2 earnings results beat analysts’ estimates | Business News

ALLENTOWN, Pa. – No doubt, PPL top executives like their business and their work. But even they will admit in the eyes of Wall Street, electric power companies are pretty dull stuff. The company even says it directly in its Investment Thesis – be visible and predictable.

So, when the company reported second quarter results that largely beat analysts’ estimates, the Street yawned, and the stock declined $0.11. That’s no big deal when you consider that PPL’s ​​stock has traded in just a $6.00 window in the past 52 weeks.

“PPL’s ​​strong second-quarter financial performance put us squarely on track to achieve our 2022 earnings guidance, and with our acquisition of Rhode Island Energy now complete, we are excited to deliver on the business plan we shared during our recent Investor Day,” said Vincent Sorgi, PPL’s ​​president and chief executive officer.

PPL announced second-quarter 2022 reported GAAP (generally accepted accounting principles) earnings of $119 million, or $0.16 per share, compared with second-quarter 2021 reported earnings of $19 million, or $0.03 per share. For the first six months of 2022, PPL reported earnings of $392 million, or $0.53 per share, compared with the reported net loss of $1.82 billion, or $2.37 per share, for the first six months of 2021.

Adjusting for special items, second-quarter 2022 earnings from ongoing operations (non-GAAP) were $222 million, or $0.30 per share, compared with $147 million, or $0.19 per share, a year ago.

Earnings from ongoing operations for the first six months of 2022 were $527 million, or $0.71 per share, compared with $366 million, or $0.47 per share, for the first six months of 2021.

Special items in the second quarter of 2022 are primarily included integration expenses associated with the acquisition of Rhode Island Energy.

“Our plan is focused on providing superior reliability and affordability for our customers, driving operational excellence, delivering top-tier annual earnings per share and dividend growth of 6% to 8% annually, and leading the clean energy transition in the regions we serve, ” added Sorgi. “Looking ahead, we’re well positioned to deliver on this plan, with $27 billion in regulated investment opportunity through 2030.”

Pennsylvania regulated segment

PPL’s ​​Pennsylvania regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.

Reported earnings in the second quarter of 2022 increased by $0.05 per share compared with a year ago. Earnings from ongoing operations in the second quarter of 2022 increased by $0.04 per share compared with a year ago. Factors driving earnings results primarily included higher peak transmission demand, returns on additional capital investments in transmission and share accretion.

Reported earnings for the first six months of 2022 increased by $0.09 per share compared with a year ago. Earnings from ongoing operations in the first quarter of 2022 increased by $0.06 per share compared with 2021. Factors driving earnings results primarily included higher peak transmission demand, returns on additional capital investments in transmission, higher sales volumes and share accretion, partially offset by higher operations and maintenance expenses.

Kentucky regulated segment

PPL’s ​​Kentucky regulated segment primarily consists of the regulated electricity and natural gas operations of Louisville Gas and Electric Company and the regulated electricity operations of Kentucky Utilities Company.

Reported earnings and earnings from ongoing operations in the second quarter of 2022 increased by $0.03 per share compared with a year ago. Factors driving earnings results primarily included higher retail rates effective July 1, 2021, and higher sales volumes, partially offset by higher depreciation expense and higher operation and maintenance expense.

In the first six months of 2022, reported earnings increased by $0.08 per share compared with a year ago. Earnings from ongoing operations in the first six months of 2022 increased by $0.10 per share compared with 2021. Factors driving earnings results were the same as those driving second quarter results.

Rhode Island Energy

PPL’s ​​Rhode Island regulated segment consists of the regulated electricity and natural gas operations of Rhode Island Energy, which was acquired on May 25, 2022.

The Rhode Island regulated segment reported a net loss of $0.04 per share in the second quarter of 2022, primarily due to integration expenses associated with the acquisition. Earnings from ongoing operations increased by $0.01 per share due to the addition of Rhode Island Energy to PPL’s ​​ongoing earnings results.

Corporate and other

The company’s corporate and other categories primarily include financing costs incurred at the corporate level that have not been allocated or assigned to the segments, certain non-recoverable costs resulting from commitments made to the Rhode Island Division of Public Utilities and Carriers and the Rhode Island Attorney General’s Office in conjunction with the acquisition of Rhode Island Energy, and certain other unallocated costs.

Reported earnings in the second quarter of 2022 increased by $0.81 compared with a year ago. Earnings from ongoing operations in the second quarter of 2022 increased by $0.03 per share compared with a year ago. Factors driving earnings results primarily included lower interest expense from less outstanding holding company debt.

Reported earnings in the first six months of 2022 increased by $0.84 from a year ago. Earnings from ongoing operations in the first six months of 2022 increased $0.07 per share from a year ago.

Factors driving earnings results were the same as those driving the second quarter.

2022 earnings forecast

PPL’s ​​2022 ongoing earnings forecast range, reaffirmed Wednesday, is $1.30 to $1.45 per share, with a midpoint of $1.37 per share. The 2022 ongoing earnings forecast range reflects a partial year estimate of contributions from Rhode Island Energy.

PPL also reaffirmed its projected compound annual earnings per share and dividend growth of 6% to 8% through at least 2025. The company’s earnings per share growth target is based off its 2022 pro forma forecast range of $1.40 to $1.55 per share, with a midpoint of $1.48 per share. The pro forma forecast range reflects a full year of earnings contributions from Rhode Island Energy.

Headquartered in Allentown, PPL Corporation (NYSE: PPL) is one of the largest companies in the US utility sector. With more than 12,000 employees, PPL’s ​​seven utilities serve more than 10 million customers in the US