By William Opalka
PPL increased earnings from ongoing operations in the fourth quarter although overall results declined because of the spinoff of its generation assets into Talen Energy.
PPL reported 2015 earnings of $682 million ($1.01/share) compared with $1.74 billion ($2.61/share) in 2014. The results reflect the loss from discontinued operations of $921 million, or $1.36 per share, from its June 1 spinoff of its competitive supply business.
Earnings from ongoing operations, however, were $1.49 billion ($2.21/share), compared with adjusted earnings from ongoing operations of $1.35 billion ($2.03/share) in 2014. That represents a 9% increase on a per-share basis.
“I think it’s incredible if you look at where we are since the spin. We’ve received two favorable rate outcomes in Pennsylvania and Kentucky, we’ve raised our guidance on our U.K. incentive revenue, we’ve lowered our exposure to the pound and we’ve moved toward increases in our dividend growth,” CEO William Spence told analysts on an earnings call Thursday.
Earnings from PPL’s U.S. operations are expected to grow 11 to 13% through 2018, with 1 to 3% growth expected in the U.K.
PPL announced that it is increasing its common stock dividend to $1.52 annually from $1.51/share, marking its 14th increase in 15 years.
The company reported fourth-quarter earnings of $399 million ($0.59/share), compared with $695 million ($1.04/share) for the same period in 2014. Adjusting for the Talen spinoff, fourth-quarter earnings from ongoing operations were $294 million ($0.43/share), compared with $330 million ($0.49/share) in 2014.
PPL’s reported earnings for 2015 included net special item after-tax charges of $807 million ($1.20/share).
Special items for the fourth quarter of 2015 included reductions to net deferred income tax liabilities resulting from a reduction in the U.K. corporate income tax rate and unrealized gains on foreign currency-related economic hedges.
More than half of PPL’s revenue comes from its U.K utility, Western Power Distribution.