PG&E says it probably ignited fires
Seeking bankruptcy protection, PG&E Corporation (PCG) reported its fourth-quarter and full-year 2018 earnings today. The company reported an unadjusted loss of $13.24 per share in the fourth quarter against earnings of $0.22 per share in Q4 2017. For fiscal 2018, PG&E reported earnings of $4.0 per share against $3.68 per share in 2017.
PG&E said the cause of the “Camp Fire” is still under investigation, but it believes its equipment probably started the fire.
PG&E recorded $10.5 billion in charges associated with liabilities for 2018 wildfires and $1.0 billion in charges relating to wildfires in 2017. The utility recorded $2.5 billion in charges relating to 2017 wildfires in Q2 2018. It reported total operating revenues of $16.76 billion in 2018, a decrease of more than 2% year-over-year.
PG&E filed for Chapter 11 bankruptcy protection on January 29. The utility faces ~$30 billion in potential liabilities associated with wildfires in 2017 and 2018. The “Camp Fire,” which killed 86 people, was the deadliest wildfire in California’s history. PG&E stock has soared almost 50% since it filed for bankruptcy last month.
Citi upgraded PG&E stock to a “buy” from “neutral” last week. It raised its target price for PCG from $11.0 to $33.0—almost double its current market price. According to CNBC, Citi expects upcoming wildfire legislation in California to limit PG&E’s wildfire risks.