Stock to Keep Your Eyes on: IDACORP Inc. (NYSE: IDA)
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BOISE, Idaho, January 18, 2019 – Shares of IDACORP Inc. (NYSE: IDA) gained 0.01% to $108.62. The stock grabbed the investor’s attention and traded 5.089K shares as compared to its average daily volume of 278.52K shares. The stock’s institutional ownership stands at 77.80%.
IDACORP, Inc. (IDA) reported third quarter 2019 net income attributable to IDACORP of $89.90M, or $1.78 per diluted share, compared with $102.20M, or $2.02 per diluted share, in the third quarter of 2018. For the first nine months of 2019, IDACORP reported net income attributable to IDACORP of $185.70M, or $3.68 per diluted share, compared with $200.70M, or $3.97 per diluted share, in the first nine months of 2018.
Net Income – Third Quarter 2019:
IDACORP’s net income decreased $12.30M for the third quarter of 2019 compared with the third quarter of 2018, primarily due to lower net income at Idaho Power. Customer growth increased operating income by $5.50M in the third quarter of 2019 compared with the third quarter of 2018, as the number of Idaho Power customers grew by approximately 14,250, or 2.6 percent, during the twelve months ended September 30, 2019. Lower sales volumes on a per-customer basis decreased operating income by $8.60M in the third quarter of 2019 compared with the third quarter of 2018, as greater precipitation in Idaho Power’s service area led agricultural irrigation customers to use 6 percent less energy per customer to operate irrigation pumps. Also, residential and commercial customers used less energy per customer for air conditioning purposes, primarily due to more moderate temperatures in the third quarter of 2019 compared with the third quarter of 2018. The decrease in residential sales volumes per customer was partially offset by the FCA mechanism (applicable to residential and small general service customers), which increased revenues in the third quarter by $1.70M.
The net decrease in retail revenues per MWh decreased operating income by $1.00M in the third quarter of 2019 compared with the third quarter of 2018. As provided by the settlement stipulation approved by the Idaho Public Utilities Commission (IPUC) in 2018 related to income tax reform, retail revenues per MWh in the third quarter of 2019 were reduced by $2.90M of non-cash accruals for future amortization related to regulatory deferrals that would otherwise be a future liability of Idaho customers. In the third quarter of 2018, the corresponding $2.90M was recorded as other O&M expense for the amortization of specified deferrals. The decrease in retail revenues per MWh from these non-cash accruals was partially offset by changes in customer mix, as volumes sold to residential customers in the third quarter of 2019 made up a greater portion of the customer sales mix compared with the third quarter of 2018. Residential customers generally pay a higher per-MWh rate than other customers.
During the third quarter of 2019, transmission wheeling-related revenues decreased $5.10M compared with the third quarter of 2018. Lower hydropower generation by other utilities in the Pacific Northwest and more moderate summer temperatures throughout the region led to lower wheeling volumes during the third quarter of 2019. Also, Idaho Power’s open access transmission tariff (OATT) rates decreased in October 2018.
Other O&M expenses were $4.40M lower in the third quarter of 2019 compared with the third quarter of 2018, due to a $1.60M decrease in labor and benefit costs and the $2.90M of non-cash amortization expense of regulatory deferrals recorded in the third quarter of 2018 pursuant to the settlement stipulation approved by the IPUC in 2018 related to income tax reform.
Under the Idaho regulatory settlement stipulation approved in October 2014, Idaho Power recorded a $1.50M provision against revenues for sharing of earnings with customers during the third quarter of 2018, based on its estimate of full-year 2018 return on year-end equity in the Idaho jurisdiction (Idaho ROE). No such provision was recorded in the third quarter of 2019.
Overall, Idaho Power operating income decreased by $1.00M for the third quarter of 2019 compared with the third quarter of 2018.
During the third quarter of 2018, Idaho Power recorded tax benefits for a $5.70M remeasurement of deferred taxes resulting from income tax reform. There was no such remeasurement in the third quarter of 2019. Also, the third quarter of 2018 included a benefit from plant-related income tax return adjustments, which are generally recorded during the third quarter each year upon completion of the prior year tax return, which reduced Idaho Power’s income tax expense in the third quarter of 2018. These items, combined with lower excess deferred income tax reversal amounts, resulted in higher income tax expense in the third quarter of 2019 compared with the third quarter of 2018.
IDA has a market value of $5.46B while its EPS was booked as $4.19 in the last 12 months. The stock has 50.24M shares outstanding. In the profitability analysis, the company has gross profit margin of 78.80% while net profit margin was 15.50%. Beta value of the company was 0.19; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 3.00.
