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RICHMOND, Va. – Dominion Energy Inc. (NYSE:NYSE:) reported lower-than-expected earnings for the fourth quarter of 2023, with adjusted earnings per share (EPS) of $0.29, below analyst consensus of $0. $38. The company’s revenue for the quarter also missed expectations, coming in at $3.53 billion versus the expected $4.21 billion.
Dominion Energy shares fell 2% following the earnings release, indicating a negative market response to the lack of earnings.
The company’s fourth-quarter GAAP net income was $273 million ($0.30 per share), down from $344 million ($0.39 per share) in the same quarter last year. For the full year, GAAP net income reached $2.29 per share, while adjusted operating income was $1.99 per share, down from $3.06 per share a year earlier . Differences between GAAP and adjusted earnings have been attributed to various factors, including earnings from discontinued operations and mark-to-market impacts of economic hedging activities.
Dominion Energy has reaffirmed its commitment to previously communicated business priorities and announced an agreement to sell a 50% minority interest in its Coastal Virginia Offshore Wind (CVOW) project. The transaction is considered positive from a credit point of view, as it offers advantages in terms of cost and risk sharing in line with the company’s strategic objectives. The CVOW project remains on schedule and on budget, with completion expected in late 2026 to provide clean energy to up to 660,000 homes.
Despite the earnings shortfall, Dominion Energy management affirmed the company’s strategic direction and financial outlook. A business review meeting with investors is scheduled for March 1, 2024, to provide a full update on the repositioned strategy and financial guidance.
The company’s CEO said: “Although fourth quarter results did not meet analysts’ expectations, we are confident in the fundamental strength of our business and our strategic initiatives, including Project CVOW, which represents a significant step forward in our transition towards renewable energy”. .”
Investors and analysts will closely monitor the company’s future performance, particularly in light of strategic initiatives and the expected completion of the CVOW project, which could have significant implications for the company’s long-term growth and profitability.
Insights on InvestingPro
Dominion Energy’s recent earnings report may have disappointed investors, but a deeper analysis of the company’s financial health using data from InvestingPro suggests a more nuanced picture. The company’s market capitalization stands at $37.88 billion, reflecting its significant presence in the energy sector. Despite the lack of earnings, Dominion Energy offers a substantial dividend yield of 5.77%, which is particularly attractive to income-focused investors. This is in line with one of the Professional investment tips which highlights the company’s significant dividend payments to shareholders.
Another Tip for InvestingPro highlights that Dominion has maintained dividend payments for 42 consecutive years, demonstrating a strong commitment to returning value to shareholders even through various market cycles. This track record of consistent dividend payments may offer some reassurance to investors concerned about the recent lack of earnings.
In terms of valuation, the company’s adjusted P/E ratio over the trailing twelve months as of Q3 2023 is 9.49, which could indicate a potentially undervalued stock compared to the broader market P/E of 23.31 . This may suggest investors should consider Dominion Energy shares in the context of the current market reaction.
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