Dominion Resources (NYSE: D) today announced unaudited reported earnings determined in accordance with Generally Accepted Accounting Principles (reported earnings) for the three months ended March 31, 2017, of $632 million ($1.01 per share) compared with earnings of $524 million ($0.88 per share) for the same period in 2016.
The principal difference between reported earnings and operating earnings for the quarter is related to investments in nuclear decommissioning trust funds.
Dominion uses operating earnings as the primary performance measurement of its earnings guidance and results for public communications with analysts and investors. Dominion also uses operating earnings internally for budgeting, for reporting to the Board of Directors, for the company’s incentive compensation plans and for its targeted dividend payouts and other purposes. Dominion management believes operating earnings provide a more meaningful representation of the company’s fundamental earnings power.
Thomas F. Farrell II, chairman, president and chief executive officer, said:
“We are pleased with our financial performance in the first quarter. Operating earnings, excluding a weather impact of 8 cents per share, were near the top of our guidance range.
“We continue to execute with strong operational and safety performance, and have seen significant progress on growth investments that will total over $4 billion this year.
“Construction of Greensville County Power Station is proceeding on time and on budget. The project is now about 30 percent complete and expected to achieve commercial operations in late 2018.
“Our Cove Point Liquefaction project is 89 percent complete. We received approval for feed gas to begin commissioning the power block and continue to work toward having the project in-service late this year.
“We continue to see long-term infrastructure growth prospects across our footprint. We are in development or construction on over 3 billion cubic feet per day of gas infrastructure projects. This includes the Atlantic Coast Pipeline project, which is expected to begin construction in the second-half of 2017.”
Reported earnings increased 13 cents per share as compared to first-quarter 2016. Business segment results and detailed descriptions of items included in reported earnings but excluded from operating earnings can be found on schedules 1, 2, and 3 of this release.
Operating earnings increased 1 cent per share as compared to first-quarter 2016 per share operating earnings. The increase is primarily attributable to revenues from regulated growth projects, lower electric capacity expense, and the addition of Dominion Questar. Factors offsetting the increase include mild weather, a reduction of Cove Point import contract revenues, and a step down in solar investment tax credits.
Dominion expects second-quarter 2017 operating earnings in the range of $0.60-$0.70 per share, compared to second-quarter 2016 operating earnings of $0.71 per share. Positive drivers include a return to normal weather and sales growth at Virginia Power. The company expects negative drivers for the quarter to include lower earnings from Cove Point due to the roll-off of one of our import contracts, lower hedged power prices at Millstone, and a step down in solar investment tax credits.
The company is maintaining its previously issued 2017 operating earnings guidance of $3.40-$3.90 per share.
In providing its operating earnings guidance, the company notes that there could be differences between expected reported earnings and estimated operating earnings for matters such as, but not limited to, acquisitions, divestitures or changes in accounting principles. At this time, Dominion management is not able to estimate the aggregate impact of these items on future period reported earnings.