DTE Energy's profit beats expectations, thanks to higher rates

DTE Energy, an electric and gas utility, beat Wall Street expectations for the third-quarter profits on Thursday as higher supply rates helped its performance in its electricity unit.

In premarket trading, shares of the company rose 1%.

According to LSEG data, on an adjusted basis the Michigan-based firm reported operating profit at $2.22 per common share for the quarter ended September 30 compared with the analysts' average estimate of just $1.88.

Why it's important

Electric companies in the United States have requested higher rates for electricity from regulators, to fund upgrades of infrastructure due to extreme weather events and growing demand from industrial electrification.

According to the Energy Information Administration, last year saw record-high rates in the U.S.

S&P 500 rose 5.5% in the third quarter while the index tracking utilities increased 18.4%.

CONTEXT

Detroit-based company Detroit Electric Company provides electricity and natural gas to more than 1.3 million Michigan customers.

The company plans to invest more than $4 billion by 2024.

By the Numbers

DTE's net income increased to $460 millions in the third quarter, up from $298.

Electric segment of the company, which is the largest by net profit, reported earnings adjusted to $437 million for the quarter, compared to $268 million one year earlier.

The gas segment, however, posted an adjusted loss in the third quarter of $13M, compared to $5M a year earlier, partly because of higher operating costs.

The company reaffirmed their 2024 adjusted profit prediction of $6.54-$6.63 per share. Analysts expect a profit per share of $6.70. (Reporting from Pooja Menon, Bengaluru. Editing by Vijay Kishore.)

(source: Reuters)