Integrys Energy Group Earnings Call Insights: Energy Services and Regulated Natural Gas

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Integrys Energy Group (NYSE:TEG) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Energy Services

Ali Agha – SunTrust Robinson Humphrey: A couple of questions. First off, on the Energy Services results, can you give us little more insight you had a strong pickup year-over-year, yet when I look at your full year guidance about what 40% or little over 40% of the full year guidance is already booked in the first quarter. So you give us some sense of how you expect the rest of the year to unfold and also the Chicago contract remind us, is any of that contributed in the first quarter or is that all coming in future quarters?

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Charles A. Schrock – Chairman, President and CEO: Ali, I’m going to have Dan Verbanac give you some of the details around your questions, just keep in mind as we noted previously, we are investing in that company in the terms of O&M for marketing and sales type of service which is going to help us grow in the future. Let me have Dan give you little more detail.

Daniel J. Verbanac – President – Integrys Energy Services, Inc.: Ali, if you noticed in the first quarter of 2013, there is a $3 million tax benefit that will reverse out before the end of the year. So that’s what is helping to attribute it to the first quarter earnings. So when you adjust for that it’s on par with last year, unit margins are – overall margins are up compared to last year and as Charlie mentioned, O&M is up slightly, compared to last year as we continue to invest in that business. So when you make that adjustment, it’s in line with our guidance for 2013. Your second question as it relates to the City of Chicago, we did start serving those customers in February, so we have about 1.5 month worth of service to those customers in the first quarter. So there is some of that business being reflected in first quarter, but the majority of it you’ll see over the remaining three quarters in 2013…

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