PHOENIX - Pinnacle West Capital Corp. (NYSE: NYSE:PNW) announced a break-even fourth quarter on earnings per share (EPS), surpassing Wall Street's expectations of -$0.13. Despite the EPS beat, the company's revenue fell short of analyst projections, coming in at $991.57 million against a consensus estimate of $1.11 billion.
The utility company's full-year financial results were positively influenced by favorable weather conditions, robust customer growth, and strong operational performance, leading to a consolidated net income of $501.6 million, or $4.41 per diluted share for the full year 2023. This compares favorably to the net income of $483.6 million, or $4.26 per diluted share, reported in the previous year.
Jeff Guldner, Chairman, President, and CEO of Pinnacle West, attributed the solid financial results to the company's strategic adaptations and the constructive outcome of the 2022 rate case. He also commended the employees for their dedication, particularly during the hottest U.S. summer on record, which saw the company's diverse generation fleet deliver reliable and resilient power.
Looking ahead, Pinnacle West provided its financial outlook for fiscal year 2024, estimating EPS to be between $4.60 and $4.80. This guidance range's midpoint of $4.70 is slightly below the analyst consensus of $4.79.
The company's stock responded positively to the earnings news, with a modest increase of +0.87% in premarket trading Tuesday, indicating investor approval of the earnings beat and the company's future prospects.
Pinnacle West's subsidiary, Arizona Public Service (APS), saw a 2% customer growth in 2023 and anticipates an average annual growth of 1.5% to 2.5% through 2026. To ensure reliability and meet the growing energy demands, APS has filed a Transmission System Plan that includes significant upgrades over the next ten years.
Guldner highlighted the company's focus on serving customers and improving the customer experience, with APS ranking in the second quartile for both business and residential customers according to J.D. Power. The company's efforts have been recognized by residential customers, who ranked APS second in their peer set for Perfect Power and Phone Customer Care.
The financial outlook and the company's commitment to reliability and customer service set the stage for Pinnacle West to continue energizing Arizona's economic expansion.
InvestingPro Insights
Pinnacle West Capital Corp. (NYSE: PNW) has demonstrated a resilient financial performance, bolstered by a series of strategic decisions that are reflected in the company's recent earnings release. To provide additional context and depth to the company's financial health and future prospects, here are some key metrics and insights from InvestingPro.
InvestingPro Data shows that Pinnacle West has a market capitalization of $7.89 billion, underlining its considerable presence in the utility sector. The company's Price/Earnings (P/E) Ratio stands at 16.41, which aligns with industry standards, indicating a balanced valuation relative to its earnings. Moreover, the company's Revenue Growth for the last twelve months as of Q3 2023 is a robust 14.58%, showcasing its ability to expand its top-line figures in a challenging economic environment.
One of the notable InvestingPro Tips for Pinnacle West is the company's commendable track record of raising its dividend for 12 consecutive years, a testament to its commitment to delivering shareholder value. Additionally, Pinnacle West has not only maintained but also paid a significant dividend to shareholders for 32 consecutive years, which is particularly appealing for income-focused investors. This is further evidenced by a substantial dividend yield of 5.08%.
The company is also trading near its 52-week low, which may present a potential entry point for investors who believe in the company's fundamentals and long-term strategy. For investors seeking further insights into Pinnacle West, there are additional InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/PNW. To enhance the value of your InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
In summary, Pinnacle West's financial stability and commitment to shareholder returns, combined with its strategic focus on customer service and operational efficiency, position it as a noteworthy company for investors to consider. With an additional 6 InvestingPro Tips available, investors can delve deeper into the company's performance and make more informed decisions.
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