PPL Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component PPL (NYSE:PPL) will unveil its latest earnings on Wednesday, August 8, 2012. PPL Corporation is an energy and utility holding company that generates and markets electricity in the northeastern and western U.S.

PPL Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 39 cents per share, a decline of 13.3% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 42 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 40 cents during the last month. Analysts are projecting profit to rise by 15% versus last year to $2.32.

Past Earnings Performance: Last quarter, the company beat estimates by 2 cents, coming in at profit of 70 cents a share versus the estimate of net income of 68 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the first quarter, profit rose 34.9% to $541 million (93 cents a share) from $401 million (82 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 41.3% to $4.11 billion from $2.91 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 10% in revenue from the year-earlier quarter to $2.24 billion.

Stock Price Performance: Between June 6, 2012 and August 2, 2012, the stock price had risen $1.03 (3.7%), from $27.56 to $28.59. The stock price saw one of its best stretches over the last year between June 25, 2012 and July 2, 2012, when shares rose for six straight days, increasing 2.6% (+72 cents) over that span. It saw one of its worst periods between June 19, 2012 and June 25, 2012 when shares fell for five straight days, dropping 2% (-55 cents) over that span.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 69.1% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 79% in the third quarter of the last fiscal year and 27.9% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.2 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.22 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 12% to $5.89 billion while assets rose 9.9% to $7.06 billion.

Analyst Ratings: There are mostly holds on the stock with nine of 12 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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