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Dominion Resources’ Revenues Fell 13%: The Weather’s to Blame

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Revenue

For the fourth quarter of 2015, Dominion Resources (D) reported $2.5 billion in revenues against $2.9 billion in revenues for the fourth quarter of 2014. This was a fall of nearly 13% year-over-year. Wall Street analysts were estimating $3.5 billion in revenues for the quarter. The graph below shows the segment-wise contribution to revenues during the quarter.

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Poor performance

The generation segment is Dominion Resources’ main contributing segment. Revenues from the segment account for nearly 60% of Dominion’s total revenues. In 4Q15, revenue from the generation segment fell nearly $300 million compared to 4Q14. Warmer weather led to lower power usage per customer. Dominion’s 1,358-megawatt combined-cycle facility at Brunswick is expected to be operational in mid-2016. With this capacity addition, earnings are expected to improve.

Dominion Virginia Power and Dominion Energy, Dominion’s natural gas (UGAZ) operator, also recorded dismal numbers during the quarter. Lower natural gas prices negatively affected Dominion Energy’s performance.

Dominion Midstream Partners

Dominion Midstream Partners (DM) reported $23.6 million adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and $24.7 million of distributable cash flow during the quarter. This was in line with management expectations.

Unfavorable weather conditions negatively impacted 4Q15 earnings of many utilities in the Midwest and South. American Electric Power (AEP) and Xcel Energy (XEL), which operate in these areas, reported poor sales numbers in 4Q15.

Next, let’s look at the Dominion-Questar deal in detail.

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