PNM 4Q2016 Earnings Quick Note

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Market Price (2/28/2017): $36.30/share; ST-Target: $42/share; NIV: $68/share

Continues to perform

Note: Please note that due to 5 companies (NRG, CNP, PNM, LNG, SRE) reporting on one day, we will be writing Quick Notes for all of the companies reporting today followed by full notes later in the week

  • PNM reported $0.34 vs. our $0.38 and consensus of $0.31
    • It seems that we over estimated contributions from TNMP
    • We appears that we over estimated retail load contribution as well
  • PNM maintains 2017E AEPS guidance at: $1.77-$1.87
  • PNM filed 2018 GRC on December 7, 2016
    • Requested $99MM revenue increase of which some $44MM is for implementing BART agreement and for the Four Corners SCR environmental work
    • 125% ROE was requested
    • Implementation date of January 1, 2018
    • Settlement discussions are scheduled to begin on March 7, 2017
    • Settlement filing is expected on March 27, 2017
    • Good basis to believe an amicable settlement would be reached given that many of the BART settlement participants have already agreed that they would not oppose any BART elements
  • Advanced Metering Infrastructure (AMI) hearings commenced February 27, 2017

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