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E.ON Q4'18 adjusted earnings plummet; full-year result beats estimates

German utility E.ON SE reported fourth-quarter 2018 adjusted net income of €297 million, compared to €462 million in the corresponding quarter of 2017.

Adjusted EBITDA totaled €1.17 billion in the 2018 fourth quarter, a decrease from €1.42 billion a year earlier. The company posted adjusted EBIT of €637 million, a drop from €957 million in the fourth quarter of 2017.

The utility reported fourth-quarter net income attributable to its shareholders of €303 million, rising from €219 million in the comparable period of 2017. Fourth-quarter sales were down 14% year over year to €8.61 billion in 2018, from €10.03 billion a year ago.

E.ON posted full-year 2018 adjusted net income of €1.51 billion, or 69 euro cents per share, rising from €1.43 billion, or 67 euro cents per share, in 2017.

The S&P Global Market Intelligence consensus normalized EPS estimate for 2018 was 66 euro cents.

Adjusted EBITDA totaled €4.84 billion in 2018, compared to €4.96 billion in the previous year. The company posted adjusted EBIT of €2.99 billion, a drop from €3.07 billion in the full year of 2017.

The utility reported net income attributable to its shareholders of €3.22 billion, or €1.49 per share, compared to €3.93 billion, or €1.84 per share, in 2017. Sales were down 20% year over year to €30.25 billion, from €37.97 billion in 2017.

E.ON's investments in 2018 totaled €3.5 billion, slightly above the prior-year's figure of €3.3 billion but below the €3.8 billion forecast for 2018. "The deviation is principally attributable to changes in project planning at our Customers Solutions and Renewables segments," the company said.

The company said it will recommend a fixed dividend of 43 euro cents per share for the 2018 financial year at the annual shareholders meeting. It also intends to propose a fixed dividend of 46 euro cents per share for 2019.

E.ON is targeting full-year 2019 adjusted net income in the range of €1.4 billion to €1.6 billion and adjusted EBIT in the range of €2.9 billion to €3.1 billion.

"The third dividend increase in a row reflects E.ON's solid business performance," said E.ON CFO Marc Spieker. "Through 2020 we expect our current business portfolio to generate annual EBIT growth of 3 to 4 percent over and our earnings per share to rise by an average of 5 to 10 percent."