RENO, NV - NV Energy has reported its First Quarter Earnings that beat last year by $9.9 million and it is anticipating a huge increase in dividends to investors.
The report, covering the first three months of the year ended March 31st and it pulled in $12.2 million compared to just $2.3 million during the same period last year.
The company increased its dividends by 31 percent, which am mounts to a little bonus for share-holders in the company. The news has NV Energy stock rising dramatically today while the rest of the market is taking a beating. NV Energy stocks were up nearly 4% as of 8 AM Pacific. Meanwhile, the Dow Jones is down more than 180 points.
NV Energy President Michael Yakira issued a statement saying he expected the rise: “Results for the first quarter met our expectations. Earnings increased despite mild weather, largely due to higher income associated with our investment in the Harry Allen generating station. Operating and maintenance expenses were virtually unchanged, reflecting the continued success of our cost control efforts.”
One reason investors are snapping up the stock is because its not too late to cash-in. The Company also announced that its board of directors will pay a cash dividend of $0.17 per share, payable June 20, 2012 to shareholders of record on June 5, 2012. If the dividend rise continues each quarter for the remainder of this year, the company speculates that the total dividends for 2012 would be $0.64 per share, a 31 percent increase compared to the $0.49 paid in 2011.
“The dividend increase we announce today demonstrates our confidence that NV Energy is entering a period of more stable earnings and sustained free cash flow,” said Mr. Yakira in the prepared statement. “In 2012, we expect to earn between $1.15 and $1.25 per share, resulting in a dividend payout ratio of approximately 50 percent.
“Our policy will be to target a dividend payout ratio in the range of 55 to 65 percent. Given our current expectations for earnings and cash flow, this should allow us to increase dividends by about 10 percent annually for the next few years. Thereafter, our policy will be to grow dividends in line with sustainable earnings growth,” Mr. Yackira said. “Earnings and free cash flow should be sufficient to achieve our target payout ratio while reducing debt, strengthening our capital structure and considering potential new investments.”
With the increase announced today, NV Energy has more than doubled its dividend since reinstating it in July 2007 at $0.08 per share. During this period the company also: completed a major generation expansion plan, reduced reliance on purchased power,
increased its commitment to renewable energy, expanded customer energy efficiency and conservation programs, and began installing smart meters system-wide.