Avista Corp. (AVA) Misses Q2 EPS by 6c, Offers Guidance

Avista Corp. (NYSE: AVA) reported Q2 EPS of $0.26, $0.06 worse than the analyst estimate of $0.32. Revenue for the quarter came in at $268.34 million versus the consensus estimate of $317.72 million.

GUIDANCE:

Avista Corp. sees Q3 2020 EPS of $1.75-$1.95, versus the consensus of $1.92.

• We are expecting that COVID-19 impacts at Avista Utilities of increased operating expenses, including bad debt, reduced industrial loads, and increased interest expense, will be mostly offset by expected tax benefits from the Coronavirus Aid, Relief, and Economic Security Act and other efforts to identify cost reduction opportunities. We have filed for deferred accounting treatment of net COVID-19 expenses in each of our jurisdictions. In July 2020, the Idaho Commission issued an order that allows us to defer certain costs related to COVID-19, net of any decreased costs and other benefits related to COVID-19. The Idaho Commission will determine the appropriateness and prudency of any deferred expenses when we seek recovery.
• We continue to expect to experience regulatory lag until 2023. We filed a general rate case in Oregon in March 2020, and anticipate filing in Washington and Idaho in the fourth quarter of 2020.
• We expect Avista Utilities to contribute in the range of $1.77 to $1.89 per diluted share for 2020. The midpoint of our Avista Utilities' guidance range does not include any expense or benefit under the ERM. Our current expectation for the ERM is a benefit position within the 90 percent customer/10 percent Company sharing band, which is expected to add $0.06 per diluted share. Our outlook for Avista Utilities assumes, among other variables, normal precipitation, temperatures and hydroelectric generation for the remainder of the year.
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• For 2020, we expect AEL&P to contribute in the range of $0.07 to $0.11 per diluted share. Our outlook for AEL&P assumes, among other variables, normal precipitation and hydroelectric generation for the remainder of the year.
• We expect the other businesses to have a loss of $0.09 to $0.05 per diluted share.
• Our guidance generally includes only normal operating conditions and does not include unusual items such as settlement transactions or acquisitions/dispositions until the effects are known and certain. We cannot predict the duration and severity of the COVID-19 global pandemic. The longer and more severe the economic restrictions and business disruption, the greater the impact on our operations, results of operations, financial condition and cash flows.

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