RICHMOND, Va. - Dominion Energy Inc. (NYSE: NYSE:D) reported lower-than-expected earnings for the fourth quarter of 2023, with adjusted earnings per share (EPS) of $0.29, falling short of the analyst consensus of $0.38. The company's revenue for the quarter also missed expectations, coming in at $3.53 billion compared to the anticipated $4.21 billion.
Shares of Dominion Energy declined by 2% following the earnings release, indicating a negative market response to the earnings miss.
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 earnings were $1.99 per share, a decrease from the previous year's $3.06 per share. The differences between GAAP and adjusted earnings were attributed to various factors, including gains from discontinued operations and mark-to-market impacts of economic hedging activities.
Dominion Energy has confirmed its commitment to previously communicated business priorities and announced an agreement to sell a 50% noncontrolling interest in its Coastal Virginia Offshore Wind (CVOW) project. The transaction is seen as credit positive, offering cost and risk-sharing benefits consistent with the company's strategic objectives. The CVOW project remains on schedule and budget, with an expected completion in late 2026 to provide clean energy for up to 660,000 homes.
Despite the earnings shortfall, Dominion Energy's management has affirmed the company's strategic direction and financial outlook. A business review investor meeting is scheduled for March 1, 2024, to provide a comprehensive update on the repositioned strategy and financial guidance.
The company's CEO stated, "While our fourth-quarter results did not meet analyst expectations, we are confident in the fundamental strength of our business and our strategic initiatives, including the CVOW project, which represents a significant step forward in our transition to renewable energy."
Investors and analysts will be closely watching the company's future performance, particularly in light of the strategic initiatives and the expected completion of the CVOW project, which could have significant implications for the company's long-term growth and profitability.
InvestingPro Insights
Dominion Energy's recent earnings report may have disappointed investors, but a deeper dive into the company's financial health using InvestingPro data 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 earnings miss, Dominion Energy offers a substantial dividend yield of 5.77%, which is particularly attractive for income-focused investors. This aligns with one of the InvestingPro Tips that highlights the company's significant dividend payments to shareholders.
Another InvestingPro Tip points out that Dominion has maintained dividend payments for an impressive 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 earnings miss.
In terms of valuation, the company's adjusted P/E ratio over the last twelve months as of Q3 2023 is 9.49, which may indicate a potentially undervalued stock compared to the broader market P/E of 23.31. This could suggest an opportunity for investors to consider Dominion Energy's shares amidst the current market reaction.
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