Will DTE Energy Follow Midwest Utilities in 4Q15?



4Q15 earnings

Michigan’s largest utility, DTE Energy Company (DTE), is set to report its 4Q15 earnings on February 10, 2016. Utilities from the US Midwest that have reported their 4Q15 earnings so far have faltered due to milder weather during the quarter. According to Wall Street analysts, DTE is expected to report earnings of $1.00 per share in 4Q15. DTE reported earnings of $1.67 per share in 4Q14.

Earnings on the expected line can take DTE’s fiscal 2015 earnings to $4.72 per share. Management has provided a guidance range of earnings of $4.65–$4.91 per share for 2015.

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Performance drivers

The US Midwest experienced milder weather during the quarter, which may hamper the 4Q15 earnings of the utilities operating there. DTE Energy (DTE) and CMS Energy (CMS) are two important utilities that operate in Michigan. Higher temperatures during the quarter, compared to that of 2014, may lead to lower power usage per customer.

Both Dominion Resources (D) and American Electric Power (AEP) have a noteworthy presence in the Midwest and the Southern US. Both of utilities reported weak sales numbers in 4Q15, influenced by warmer weather.

Apart from the utility business of DTE Energy, energy trading and natural gas (UNG) logistics business also contribute significantly in DTE’s earnings. We will see the segmental performance in detail in the next part.

3Q15 highlights

For 3Q15, DTE Energy’s operating earnings were $252 million, or $1.40 per share, against $186 million, or $0.87 per share, for 3Q14. The year-over-year earnings gain mainly resulted from growth in the electric segment. Favorable weather and lower storm expenses contributed positively in 3Q15.


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