Dominion Resources (D 2.09%) reported its second-quarter results before the market opened on Wednesday. The utility's earnings were at the higher end of its guidance range as growth projects delivered strong results. Those results are now giving the company the confidence to affirm its 2015 earnings guidance.
A look at the numbers
Dominion generated operating earnings of $429 million, or $0.73 per share. Not only were earnings at the high-end of the company's guidance range of $0.65 to $0.75 per share, but the result beat the consensus estimate of analysts by $0.01. Furthermore, results were well above the year-ago quarter when it earned $361 million, or $0.62 per share.
Driving this growth was higher revenue from growth projects and the weather, as well as the fact that it didn't have a planned refueling outage at its Millstone Power Station during the quarter as it did last year. Virtually all of the growth came from the company's Dominion Generation segment, as earnings jumped $91 million year over year, to $250 million. This more than offset basically flat segment earnings at both Dominion Virginia Power and Dominion Power.
A look at the outlook
The company expects strong growth in the third quarter as it sees earnings in a range of $0.95 to $1.10 per share, which would be above the year-ago mark of $0.93 per share. Powering this projected growth is the expectation for a return to normal weather, as well as higher revenue from growth projects. Given that expectation, when combined with its strong second-quarter results, Dominion is confident in its full-year outlook, which is why it affirmed operating earnings guidance in the range of $3.50 to $3.85 per share.
Looking even farther ahead, the company continues to make progress on several major projects that remain on time and on budget. Construction of its Brunswick County, 1,358-megawatt natural gas combined-cycle facility is now 75% complete and scheduled to begin service in the middle of next year.
The company also filed for construction approval of a 1,588-megawatt gas-fire combined-cycle facility in Greensville County, Va., which it expects will be operational in late 2018. Meanwhile, it's also planning to develop 400 megawatts of utility-scale solar in Virginia. Finally, the company is about 31% complete with its Cove Point LNG project.
Investor takeaway
Dominion's generation segment powered strong second-quarter growth for the company as earnings were at the high end of the company's estimates. Looking ahead, it expects its strong growth to continue, as it's on pace to meet its full-year expectations. Also, with several major growth projects underway, the company should continue to generate meaningful growth for investors during the next few years as these projects come online.
