PPL's Q2 Earnings Top Estimates on Higher Electricity Sales

Core Viewpoint - PPL Corporation reported strong second-quarter 2024 operating earnings, exceeding expectations, while total revenues slightly missed estimates, indicating a mixed performance in financial results. Financial Performance - Operating earnings per share (EPS) for Q2 2024 were 38 cents, surpassing the Zacks Consensus Estimate of 31 cents by 22.6% and increasing 31% from 29 cents in the same quarter last year [1] - Total revenues amounted to $1.88 billion, missing the Zacks Consensus Estimate of $1.91 billion by 1.7%, but reflecting a 3.2% increase from $1.82 billion year-over-year [2] - Operating income reached $390 million, up 27.9% from $305 million in the prior year [3] Segment Performance - Pennsylvania Regulated segment reported adjusted EPS of 21 cents, a 40% increase from 15 cents year-over-year, driven by higher sales volumes and transmission revenues [5] - Kentucky Regulated segment achieved adjusted EPS of 18 cents, up 50% from 12 cents, attributed to increased sales volumes due to weather and lower operating costs [5] - Rhode Island Regulated segment maintained adjusted EPS at 1 cent, with higher distribution revenues offset by increased operating costs [6] Expenses and Financial Position - Total operating expenses decreased to $1.49 billion, down 1.8% from $1.52 billion year-over-year, primarily due to reduced energy purchase expenses [3] - Interest expense rose to $182 million, a 10.3% increase from $165 million in Q2 2023 [4] - As of June 30, 2024, cash and cash equivalents were $282 million, down from $331 million at the end of 2023, while long-term debt increased to $15.8 billion from $14.6 billion [7] Guidance and Future Outlook - PPL reiterated its 2024 EPS guidance of $1.63-$1.75, with the Zacks Consensus Estimate at $1.70, slightly above the midpoint of the guidance [8] - The company expects a long-term annual earnings growth rate of 6-8% through 2027 [8] - Capital expenditure for 2024 to 2027 is restated at $14.3 billion, with anticipated O&M savings of at least $175 million by 2026 [9] Market Position - PPL currently holds a Zacks Rank 2 (Buy), indicating a favorable market position [10]