Tucson Electric Power Co. parent UNS Energy Corp. beat analysts' third-quarter earnings expectations thanks in part to a recent rate increase, but the company handily missed Wall Street's revenue forecast.
UNS reported third quarter 2013 net income of $68 million, or $1.62 per share, compared with net income of $50.7 million, or $1.21 per share in the same period last year and analysts' average estimate of $1.60 per share.
Operating revenue totaled $437 million, up 0.7 percent from third-quarter 2012, but analysts polled by Thomson Financial Network had expected revenue of $490.5 million.
The company's shares were trading down slightly, at $49.07, in late-afternoon trading on the New York Stock Exchange.
TEP’s retail power sales volume increased by 1.1 percent in the third quarter, due in part to an 8.9 percent increase in cooling degree days — a temperature-based measure of energy needed to cool a home or business — compared with the third quarter of 2012.
The higher volume sales and higher base rates that went into effect July helped boost TEP's third-quarter retail revenue 2.6 percent compared with 2012, the company said.
Including subsidiary UNS Electric, which serves Mohave and Santa Cruz counties, UNS Energy's revenue from retail power sales rose 2.5 percent in the third quarter, but revenue from wholesale power sales and other revenues fell.
UNS Electric's third-quarter net income dropped 17 percent from last year, to $5.3 million due partly to the loss of an industrial customer. UNS Gas reported a net loss of $1.3 million in the third quarter of 2013, due in part to higher operating and maintenance expenses.
UNS Energy estimated its 2013 earnings at between $2.95 and $3.10 per share, and 2014 earnings at $3.15 to $3.45 per share. The company also said it expects that 2015 earnings will be above 2014 levels.
UNS had not provided earnings forecasts since last year because of uncertainty over the rate case.