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Hydro One Q2 EPS down on weather impact

Hydro One Ltd. on Aug. 8 posted 2017 second-quarter diluted EPS of 20 Canadian cents, compared to diluted EPS of 25 cents in the second quarter of 2016.

The S&P Capital IQ normalized consensus estimate for the second quarter of 2017 was 24 cents.

Hydro One's net income attributable to common shareholders for the most recent quarter decreased to C$117 million from C$152 million in the corresponding quarter in 2016.

"We continued to deliver on enhancing customer satisfaction and value while implementing operational improvements and efficiency gains across the organization, despite unseasonably mild weather during the second quarter," Hydro One President and CEO Mayo Schmidt said in the earnings release.

For the second quarter of 2016, the company recorded revenues of C$1.37 billion, down from C$1.55 billion in the prior year period. The company said the pending decision on its 2017-2018 transmission rate filing has also impacted revenues.

The company's transmission segment contributed C$361 million in revenues during second-quarter 2017, while the distribution segment contributed C$998 million. The second quarter of 2016 saw transmission-segment revenues of C$381 million and distribution-segment revenues of C$1.15 billion. The results are impacted by the change in the 2017 allowed return on equity to 8.78% from 9.19%.

Net cash from operating activities for the three months ending June 30 dropped to C$280 million from C$304 million in the previous year period.

The company's capital investments fell to C$406 million for the most recent quarter, from C$417 last year.

On July 19, Hydro One also announced its merger with Avista Corp., enabling Hydro One to expand into five U.S. states. The $5.3 billion transaction is expected to close in second half of 2018.

Hydro One's board also declared a quarterly cash dividend of 22 Canadian cents per common share payable on Sept. 29 to shareholders of record Sept. 12.