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Avangrid Q4, FY'17 adjusted net income misses Street estimates

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Avangrid Q4, FY'17 adjusted net income misses Street estimates

Avangrid Inc. on Feb. 20 reported fourth-quarter 2017 adjusted net income of $188 million, or 61 cents per share, compared to fourth-quarter 2016 adjusted net income of $207 million, or 67 cents per share.

The S&P Capital IQ normalized consensus EPS estimate for the most recent quarter was 63 cents per share.

Avangrid Networks Inc. contributed $133 million, or 43 cents per share, in fourth-quarter 2017 adjusted net income, compared with $161 million, or 52 cents per share, in the corresponding quarter of 2016.

Avangrid Renewables LLC posted fourth-quarter adjusted net income of $6 million, or 2 cents per share, compared with an adjusted net loss of $5 million, or a loss of 2 cents per share, in the comparable quarter of 2016.

The corporate segment recorded adjusted net income of $49 million, or 16 cents per share, compared with $51 million, or 17 cents per share, a year earlier.

On a GAAP basis, the Iberdrola SA subsidiary booked a fourth-quarter 2017 net loss of $77 million, or 25 cents per share, compared with $207 million, or 67 cents per share, for the same period in 2016.

The loss primarily stems from the company's gas storage segment, which incurred a net loss of $472 million, or a loss of $1.53 per share, compared with net income of $4 million, or 1 cent per share, in the fourth quarter of 2016.

Avangrid on Feb. 16 announced a deal to sell its gas storage business to Amphora Gas Storage USA LLC, an affiliate of energy infrastructure-focused private equity firm ArcLight Capital Partners LLC. The transaction is expected to close in the second quarter.

Fourth-quarter 2017 operating revenues grew to $1.53 billion in 2017 from $1.49 billion in 2016. The company recorded an operating loss of $425 million, compared with operating income of $306 million in the comparable quarter of 2016.

Avangrid reported full-year 2017 adjusted income of $682 million, or $2.20 per share, missing the S&P Capital IQ normalized consensus EPS estimate of $2.22. The company had booked $643 million, or $2.08 per share, in 2016 adjusted net income.

The company attributed the 6% year-over-year increase to the implementation of new rates at Avangrid Networks and the contribution of new wind capacity.

The results exclude the gas storage businesses and certain losses related to its sale, mark-to-market adjustments in the renewables segment, restructuring charges, an impairment of an investment in renewables, the impacts of tax reform and the sale of certain equity investments in 2016.

Including those items, Avangrid reported GAAP 2017 net income of $381 million, or $1.23 per share, compared with $632 million, or $2.04 per share, in 2016.

Operating revenues for the year totaled $5.96 billion, a decrease from $6.02 billion in 2016, while operating income plummeted year over year to $385 million from $1.19 billion.

Looking ahead, the company is targeting full-year 2018 adjusted EPS between $2.22 and $2.50 and GAAP EPS of $2.16 to $2.46.

"As we look to 2018 and beyond, we will continue to execute on our long-term strategy of increasing renewable installed capacity and effectively managing our costs to become more efficient," said Avangrid CEO James Torgerson.