2 Aug

Can PPL Report Higher Q2 2018 Earnings?

WRITTEN BY Vineet Kulkarni


PPL Corporation (PPL) is scheduled to report its second-quarter financial results on August 7. The quarter ended on June 30. According to analysts’ consensus, PPL is expected to report earnings of $0.54 per share compared to $0.52 per share in Q2 2017.

Although PPL stock showed a decent recovery after the Fed’s second interest rate hike this year, it has fallen more than 8% year-to-date, significantly outperforming the broader utilities (XLU) (IDU).

Can PPL Report Higher Q2 2018 Earnings?

Earnings drivers

PPL, one of the internationally diversified utilities in the country, is expected to report revenues of $1.75 billion year-over-year in Q2 2018 compared to $1.73 billion.

Its investments in its regulated base during the quarter could have a notable impact on its earnings. Weather and customer base growth could be some of the important drivers behind its earnings. FirstEnergy (FE), the utility transforming into a pure-play regulated utility, reported a decent rise in its Q2 2018 earnings, mainly due to favorable weather. Be sure to read FirstEnergy Reported Higher Q2 2018 Earnings Due to the Weather.

PPL generates more than two-thirds of its revenue from the United Kingdom. The rest comes from Kentucky and Pennsylvania. Volatile exchange rate movements could strain its cash flows in the United Kingdom. It has hedged 100% of its cash flows for 2018 and 2019.

PPL’s management has given a 2018 EPS guidance range of $2.20–$2.40. It aims to grow 5%–6% annually through 2020, which is roughly in line with the industry average.

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