Portland General Electric Company (POR) Q4 2017 earnings summary

Executive summary

• FY17 revenue rose 4.5% to $2.009B and operating income increased to $376M; GAAP net income fell to $187M, or $2.10 diluted EPS, from $193M and $2.16.

• Excluding the $17M tax-reform charge, FY17 net income was $204M and diluted EPS was $2.29, up 6.0% YoY.

• Q4 revenue was $515M, operating income $77M, net income $40M and diluted EPS $0.48, compared with $524M, $106M, $61M and $0.68 in Q4 2016.

Financial highlights

• Gross margin was $1.417B, 70% of revenue, versus $1.306B and 68% in 2016; purchased power and fuel expense declined 4% to $592M.

• Operating expenses increased to $1.633B from $1.590B; income tax expense rose to $86M from $50M, including the $17M tax-remeasurement charge.

• Operating cash flow was $597M, up from $553M; year-end cash was $39M versus $6M.

• Retail revenue increased 4.3% to $1.860B, while retail energy deliveries rose 3.9% to 19.718M MWh.

Outlook and guidance

• 2018 capital expenditures are expected to be $551M; operating cash flow is projected at $575M-$625M, with up to $100M of debt securities planned.

• 2018 weather-adjusted retail deliveries are projected to be nearly comparable to or slightly below 2017, reflecting the paper-customer closure and continued efficiency efforts.

• The 2019 rate-case filing seeks an $86M annual revenue-requirement increase, or ~4.8% over approved prices after tax-reform adjustments; new prices are targeted for January 1, 2019.

• 2018 customer prices include an OPUC-authorized $16M annual revenue increase, or ~1%, effective January 1, 2018.