Atlantic Power (AT) Tops Q3 EPS by 12c, Revenues Miss

Atlantic Power (NYSE: AT) reported Q3 EPS of $0.10, $0.12 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $71.1 million versus the consensus estimate of $83.3 million.

Third Quarter 2019 Financial Highlights

• Net income attributable to Atlantic Power increased to $12.6 million or $0.10 per diluted share from a net loss of $3.2 million or ($0.03) per diluted share in Q3 2018
• Project income increased to $27.9 million from $26.2 million in Q3 2018
• Cash from operating activities increased to $36.4 million from $19.5 million in Q3 2018
• Project Adjusted EBITDA increased to $48.9 million from $45.4 million in Q3 2018
• Repaid $18.3 million of term loan and project debt; leverage ratio improved to 3.7 times
• Liquidity at September 30, 2019 of $181 million, including approximately $24 million of discretionary cash, after using $29 million for two acquisitions in July and August

Third Quarter 2019 Developments

• Completed the acquisition of the Allendale and Dorchester contracted biomass plants for $12.6 million and the acquisition of equity interests in the Craven County and Grayling contracted biomass plants for $18.7 million
• Williams Lake biomass plant executed new 10-year contract with BC Hydro, effective Oct. 1, 2019
• Equipment malfunction and fire at Cadillac plant resulted in significant damage; financial impact expected to be limited to insurance deductibles of approximately $2.5 million to $3.0 million

2019 Updated Outlook

• Increased 2019 Project Adjusted EBITDA guidance to a range of $185 million to $195 million from a range of $175 million to $190 million(1)
• Increased estimate of 2019 operating cash flow (assuming working capital changes are nil) to a range of $115 million to $125 million from a range of $100 million to $115 million

"During the third quarter, we acquired two contracted biomass plants and equity interests in two others at attractive valuations. These acquisitions increase the level and length of our contracted cash flows. We also executed a new ten-year contract for our Williams Lake biomass plant. All of these are expected to be accretive to our estimates of intrinsic value per share," said James J. Moore, President and CEO of Atlantic Power. "Financial results for the third quarter exceeded our expectations, in a continuation of the first half performance, and we have increased our full year guidance accordingly. We continue to allocate our cash flow and liquidity rationally to debt reduction, repurchases of common and preferred shares, and external acquisitions when expected returns appear to be superior to those we can obtain internally."

Mr. Moore continued, "The most challenging event of the quarter was the fire at our Cadillac plant in September. Fortunately, no one was injured. We tell our people that safety is more important than money. We are proud of our Cadillac employees as well as those across Atlantic Power for the way they responded on September 22 and afterward. Although the plant incurred significant damage and is expected to be out of service for a lengthy period, we expect that the financial impact will be limited by our insurance coverage."

For earnings history and earnings-related data on Atlantic Power (AT) click here.

You May Also Be Interested In

• Alphabet (GOOGL) soars 16% on Q1 results beat, first-ever dividend
• T-Mobile posts mixed Q1 top and bottom line, expects more subscribers in 2024
• SPS Commerce (SPSC) Tops Q1 EPS by 12c