First-quarter 2017 EPS for the 53 companies in the RRA utility universe increased 7.3% on average compared to the corresponding quarter in 2016. Both electric and gas companies saw meaningful earnings growth during the quarter. Electric utility EPS rose 7.9% on average, while gas utility EPS was up 5.8% year-over-year.
Earnings results for the 12 months that ended March 31 showed solid growth for utilities, with an average gain of 5.3% year over year. An exceptionally hot summer followed by a fairly chilly start to the winter propelled earnings to a strong finish in 2016. Despite mild weather in the first quarter of 2017, utilities managed to grow earnings through a variety of factors, including rate increases and lower expenses.
Gas utilities generally realize a majority of their profits during the winter heating season, with the fourth quarter accounting for about 36% of the nationwide annual heating degree day total and the first quarter accounting for about one-half. Heating degree days on a nationwide basis in first quarter 2017 were 5% below those in the same period in 2016 and 17% below the norm for the quarter.
In the RRA utility universe, PNM Resources Inc. had the largest adjusted earnings increase on a percentage basis, with a jump of 115%, as income grew to 28 cents per share in the first quarter of 2017 from 13 cents per share in the first quarter of 2016. The increase was largely driven by a rate increase that was implemented in October 2016. Additionally, an outage at the Four Corners power plant negatively impacted earnings in first quarter 2016; similar outage time at Four Corners is planned later in 2017. Assorted other factors also boosted PNM's earnings, including cost savings. Management affirmed the 2017 EPS guidance range of $1.77 to $1.87.
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