Dominion Resources' (NYSE: D) operating earnings moved higher during the first quarter thanks to the recent completion of growth projects and the addition of Dominion Questar. Those positives more than overcame the negative impact from the mild weather during the quarter. Because of that, the company remains on track to meet its full-year earnings target.
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Dominion results: The raw numbers
Data source: Dominion Resources.
Image source: Getty Images.
What happened with Dominion this quarter?
Dominion's strategic investments are paying off:
- Dominion's operating earnings came in around the midpoint of its $0.90 to $1.10 per share guidance range.
- Powering the company's in-line results were incrementalincome from recently completed growth projects, lower electric capacity expenses, and the addition of Dominion Questar. Those factors enabled the company to offset a reduction in import contract revenue at Cove Point, a step down in solar investment tax credits, and a negative impact from the mild weather. In fact, the weather cost the company $0.08 per share in earnings during the quarter; without it, the company's results would have been at the high end of its guidance range.
- The company continues to press forward with its major growth projects. Construction advanced on both the Cove Point Liquefaction project and the Greenville County Power Station, which Dominion expects to place in service later this year and in late 2018, respectively. Further, the company and its partners plan to start construction on the Atlantic Coast Pipeline later this year.
What management had to say
CEO Tomas Ferrell commented on the company's results, saying:
Dominion delivered another steady quarter of earning growth. While the mild weather dragged results down a bit, the company still grew thanks to the completion of several strategic initiatives. Meanwhile, it has several more growth projects in the pipeline that should power resultsin the future, including the Cove Point Liquefaction project that should enter service by year end.
Dominion is off to a solid start to 2017, which enabled the company to reaffirm its full-year guidance that operating earnings would be in the range of $3.40 to $3.90 per share. While that guidance represents a 3.9% decrease from last year at the midpoint, growth should return in 2018 thanks to the expected ramp up of Cove Point.
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