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DTE Energy Company Reports Operating Results (10-Q)

October 24, 2012 | About:
10qk

10qk

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DTE Energy Company (DTE) filed Quarterly Report for the period ended 2012-09-30.

Dte Energy Company has a market cap of $10.55 billion; its shares were traded at around $60.96 with a P/E ratio of 16.5 and P/S ratio of 1.2. The dividend yield of Dte Energy Company stocks is 4%. Dte Energy Company had an annual average earning growth of 4.9% over the past 10 years.

Highlight of Business Operations:

Net income attributable to DTE Energy increased $1 million and $6 million for the 2012 third quarter and nine-month period, respectively. The increases were due primarily to increased earnings from an equity investment.

Operating revenues increased $218 million and $594 million in the three and nine months ended September 30, 2012, respectively. The increase in the third quarter of 2012 is primarily due to a $187 million increase related to new reduced emissions fuel projects (REF) and a $48 million increase associated with higher volumes from existing REF projects, of which $191 million represent affiliate transactions, partially offset by a $19 million decrease from lower volumes associated with the steel business. The increase in the nine-month period is primarily due to a $523 million increase related to new REF projects and a $106 million increase associated with higher volumes from existing REF projects, of which $484 million represent affiliate transactions, partially offset by a $24 million decrease from lower volumes associated with the steel business and a $11 million decrease in coal transportation and marketing services primarily related to lower volumes.

Other (income) and deductions increased by $15 million and $38 million in the three and nine months ended September 30, 2012, respectively. The increases were due primarily to gains recognized in connection with the sale of membership interests in REF facilities (treated as sales of tax credits for financial reporting purposes).

Outlook - The Company has constructed and placed in service nine REF facilities including two facilities located at third party owned coal-fired power plants. The Company has sold membership interests in two of the facilities located at the Detroit Edison sites. We continue to optimize these facilities by seeking tax investors for facilities operating at Detroit Edison and other utility sites. Additionally, we intend to relocate four underutilized facilities, located at Detroit Edison sites, to alternative coal-fired power plants which may provide increased production and emission reduction opportunities in 2012 and future years. Two of the underutilized facilities are currently being relocated to third party owned coal-fired power plants. The proceeds from executed and planned sales of membership interests in the REF facilities are expected to be received by the Company on an installment basis, and the Company will recognize the related gains (treated as sales of tax credits for financial reporting purposes) as production tax credits are generated by the respective facilities.

Gross margin decreased $37 million in the third quarter of 2012 and decreased $54 million for the nine months ended September 30, 2012. The overall decrease in gross margin for the third quarter was the result of lower economic earnings related to our power and gas trading strategies due to fewer market opportunities and timing related losses for our gas full requirements strategy. The overall decrease in gross margin for the nine months ended September 30, 2012 was a result of the unseasonably mild temperatures that negatively impacted our power and gas full requirements strategies and lower economic earnings related to our power and gas trading strategies due to fewer market opportunities.

Read the The complete Report

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10qk
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