A Look at Dominion Resources’ 1Q17 Earnings and Growth Prospects
One of the largest utilities in the US, Dominion Resources (D) posted 1Q17 earnings per share (or EPS) of $0.97 compared with its EPS of $0.96 in 1Q16.
Dominion Resources derives more than 80% of its earnings from regulated operations. Its management provided EPS guidance of $3.40–$3.90 per share for 2017, implying flat-to-negative earnings growth compared to 2016. However, Dominion is expecting 6%–8% earnings growth per year starting in 2018, which is higher than the industry average of 4%–6%.
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Dominion Resources’ 1Q17 earnings were positively influenced by regulated growth projects, lower electric capacity expenses, and contributions from Dominion Questar.
Considering its segment-wise earnings, Dominion Virginia Power contributed EPS of $0.20 in 1Q17, the same as in 1Q16. Dominion Energy, which includes Dominion Questar, reported earnings of $0.42 per share compared with its earnings of $0.31 per share in 1Q16. Dominion Generation contributed $0.41 per share in 1Q16 and 1Q17.
Dominion Resources’ management gave an EPS guidance range of $0.60–$0.70 for 2Q17.
Dominion Resources is one of the fastest-growing utilities (XLU) in the US. It expects long-term earnings growth of ~10% through 2021—nearly double the industry average.
Apart from Dominion Resources, NextEra Energy (NEE) is one of the fastest-growing utilities in the industry. NextEra’s long-term earnings growth is also near 10%.