Stock is up 50% since filing for bankruptcy
The California Department of Forestry and Fire Protection (or Cal Fire) has blamed PG&E Corporation (PCG) for causing the most devastating wildfire in state history last year. The state agency said that transmission lines owned by San-Francisco-based PG&E ignited the fire in Butte County, which rapidly spread across the dry vegetation.
Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.
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” killed 85 people and torched 18,804 structures last November.
PG&E stock has been down more than 25% so far this year. In comparison, the Utilities Select Sector SPDR ETF (XLU) has risen 12%, and the S&P 500 has risen 14% in the same period. Interestingly, since filing for bankruptcy, PG&E stock has risen more than 50%.
In February, PG&E said it believes its equipment probably caused the fire. PG&E reported adjusted EPS of $1.04 for the quarter ending on March 31. In the first quarter of 2018, PG&E reported EPS of $0.91. The utility reported $192 million in wildfire-related costs during the quarter. The company didn’t provide its earnings guidance for 2019 due to uncertainties associated with wildfire-related liabilities.