Sierra Pacific: More Might Be Less (SRP)
November 3, 2008 by Douglas A. McIntyreBack in September, Sierra Pacific Resources (NYSE:SRP) changed the names of both its utility companies to NV Energy. That didn’t do much to help its third-quarter earnings, which the company reported before the market opened this morning. Sierra reported EPS of $0.64 and revenue of $1.19 billion, compared with analysts’ estimates of $0.63 EPS and revenues of $1.27 billion.
The company’s president and CEO said Sierra is "pleased that ourfinancial and operating results remain strong despite our slower rateof growth." This slower growth is about to come to a full stop.Estimates for the fourth quarter show EPS of just $0.02 on revenue expected to be about $400 million lower than this quarter.
The company’s long-term debt totals about $4.8 billion and its marketcap is less than $2 billion. In July, Sierra issued $500 million in newsenior debt to pay down its revolver. Customers are also using lesselectricity, which is not welcome news to a company that attributed itsearnings to rate increases.
Sierra’s share price closed at $8.29 on Friday, down about 53% from its 52-week high.
Paul Ausick
November 3, 2008
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