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Nonfuel rate hike boosts El Paso Electric's Q4, FY'17 results, misses estimates

El Paso Electric Co. posted improved results for fourth quarter and full year 2017, due to a nonfuel base rate increase approved in December 2017 by the Public Utility Commission of Texas.

"We reached an important milestone in the fourth quarter when the Public Utility Commission of Texas approved the unopposed settlement in our 2017 Texas rate case," El Paso Electric CEO Mary Kipp said in a Feb. 27 statement. "The settlement is the culmination of several years of dedicated effort and incorporates into our Texas rates over $1 billion of infrastructure investments, including Montana Power Station Units 1 through 4."

The company expects to begin issuing credits to its Texas customers in the first half of this year related to federal tax reform enacted at the end of 2017. A separate regulatory proceeding is underway in New Mexico.

El Paso Electric reported net income of $6.5 million, or 16 cents per share, in the fourth quarter of 2017, up from $5.7 million, or 14 cents per share, in the same period in 2016. The result missed the S&P Capital IQ consensus normalized EPS estimate of 21 cents.

Operating revenues for the most recent quarter grew to $196.1 million, compared with $188.0 million in the 2016 fourth quarter.

For the full year, El Paso Electric booked net income of $98.3 million, or $2.42 per share, in 2017, compared with $96.8 million, or $2.39 per share, in 2016. The result missed the S&P Capital IQ consensus normalized EPS estimate of $2.48.

Operating revenues totaled $916.8 million in 2017, up from $886.9 million in 2016.

The company provided earnings guidance for 2018 in the range of $2.30 per share to $2.65 per share.