WEC Energy Group Earnings Came In Just As You Might Expect

By Tyler CroweFool.com

WEC Energy Group -- formerly known as Wisconsin Energy -- reported its earnings on Wednesday. As you can imagine from an electric and natural gas utility company with essentially all of its business coming from the regulated side of the utility sector, this quarter's numbers were pretty much in line with what happened last year. Here's a quick snapshot of what happened this quarter and what management had to say about the company's future.

WEC Energy Group's Quarter: By the Numbers

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Source: WEC Energy earnings release.

Those numbers may seem a bit off, considering the large upticks in revenue and operational income and the small change in earnings per share. But those reported numbers also don't reflect the impact of the recent $12 billion acquisition of Integrys. Management estimates that the additional shares in WEC Energy equated to a $0.23-per-share dilution, which was almost completely offset by the $0.21-per-share contribution that Integrys made to the bottom line.

What happened at WEC Energy this quarter?

  • Management and the board announced a quarterly dividend of $0.4575 per share, a 17% increase from the same time last year.
  • Despite weather conditions throughout July, August, and September that aren't typically conducive to electricity use, the company saw overall electricity consumption across its entire platform increase.
  • Residential electricity consumption increased 11.5%, small commercial and industrial customer consumption increased by 1.6%, and large commercial and industrial consumption -- excluding mine activity that has shut in -- stayed flat.
  • Its We Energies segment added 6,000 electric customers and 10,000 gas customers compared with this time last year.

What management had to sayAccording to CEO Gale Klappa, the acquisition of Integrys gives WEC Energy plenty of new venues for investment across its electric and natural gas systems that should keep it busy for many years to come. As a utility, these investments inevitably trickle down to earnings:

Klappa on the company's dividend policy going forward:

Looking forwardAs with most utility companies, the lack of news around WEC Energy Group's earnings is the good news. The company's plans to invest $1.3 billion to $1.5 billion annually is mostly dedicated to natural gas transmission and distribution, which will give the company greater access to customers across its systems in Minnesota, Wisconsin, and Michigan. If the company can execute its expansion plan and start to realize some cost benefits from the Integrys merger, then WEC Energy should be able to meet its ambitious dividend targets -- which is pretty much all a dividend investor can ask for.

The article WEC Energy Group Earnings Came In Just As You Might Expect originally appeared on Fool.com.

Tyler Crowe has no position in any stocks mentioned.You can follow him at Fool.comor on Twitter@TylerCroweFool. The Motley Fool recommends WEC Energy Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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