Portland General Electric Company (POR) Q4 2018 earnings summary

Executive summary

• 2018 net income was $212 million, or $2.37 diluted EPS, versus $187 million and $2.10 in 2017; lower income tax expense was a major contributor.

• Focus areas included decarbonization, transportation electrification, and grid modernization; customer count rose 1.2% to 885,000.

• Generation availability was 93% excluding Colstrip; distribution reliability improved, with fewer and shorter service disruptions than in 2017.

Financial highlights

• Revenue was $1.991 billion versus $2.009 billion in 2017; operating income was $346 million versus $380 million.

• Net income increased to $212 million from $187 million; adjusted to exclude TCJA effects, 2018 net income was $204 million and diluted EPS was $2.29.

• Purchased power and fuel expense fell $21 million to $571 million; gross margin was $1.420 billion, or 70% of revenue.

• Operating cash flow was $630 million; capital expenditures were $595 million, and dividends declared were $1.4275 per share.

Outlook and guidance

• 2019 diluted EPS guidance is $2.35–$2.50; expected average annual earnings growth is 4%–6% from 2018 through 2021.

• 2019 capital requirements are expected to be $580 million; cash from operations is forecast at $550–$600 million, with debt issuance of up to $375 million and commercial paper as needed.

• 2019 retail deliveries are projected near or slightly above 2018 weather-adjusted levels, reflecting industrial strength partly offset by efficiency and conservation.

• 2019 priorities include competitive energy options, top-quartile reliability and plant availability, and a 10th consecutive year as the leading voluntary renewable program nationally.