Pinnacle West Quarterly Profit Slumps on Costs

Cold weather and higher expenses weighed on Pinnacle West’s (NYSE:PNW) first-quarter results, though investors pushed the shares slightly higher in morning trade on its optimistic outlook.

The Phoenix-based provider of retail and wholesale electric services on Friday posted a net loss of $15.1 million, or 14 cents a share, compared with a loss of $6 million, or 6 cents a share, in the same quarter last year. The Street had predicted break-even earnings.

Revenue for the three months ended March 31 was $659.6 million, up from $620.3 million a year ago, ahead of average analyst estimates polled by Thomson Reuters of $647.29 million.

Pinnacle CEO Don Brandt said the results were in-line with its expectations, noting the company implemented several improvements over the past few years in customer satisfaction, operational excellence and cost management.

“Retail electricity sales improved modestly over this time last year and appear to indicate stabilized economic conditions in Arizona,” he said. “Going forward, we intend to build on this positive momentum.”

Fueling the performance was higher retail customer usage, excluding the effects of colder-than-usual weather, more than offset by higher expenses and lower income tax benefits.

The energy company continues to expect fiscal earnings in the range of $3 to $3.15 a share, in line with analyst estimates of $3.08 a share.