Pinnacle West Reports Third-Quarter Earnings

Pinnacle West Capital Corp. (NYSE: PNW) today reported consolidated net income attributable to common shareholders for the 2016 third quarter of $263.0 million, or $2.35 per diluted share. This result compares with net income of $257.1 million, or $2.30 per share, for the same period a year ago.

"Our quarterly financial performance was solid despite the impact of abnormally mild temperatures in August and September compared to historical weather trends," said Pinnacle West Chairman, President and Chief Executive Officer Don Brandt. "Customer count and electricity sales are growing year to date, operational excellence remains a hallmark of our company, and our employees continue to control costs without sacrificing top-tier reliability for our nearly 1.2 million customers. As a result, we remain optimistic that we will meet our full-year earnings guidance range."

The 2016 third-quarter results comparison was positively impacted by the following factors:
  • Higher lost fixed cost recovery revenue and an increase in transmission revenues improved earnings by $0.09 per share compared to the 2015 third quarter.
  • Lower operating expenses contributed to earnings by $0.02 per share.
  • Retail electricity sales improved earnings $0.02 per share due to customer growth and changes in customer usage patterns and related pricing. Compared to the same quarter a year ago, weather-normalized retail sales were flat, while total customer growth increased 1.4 percent quarter over quarter.

These positive factors were partially offset by t he effects of weather variations, which impacted results by $0.09 per share compared to the year-ago period.

Despite the second-hottest July on record, the other two months in the quarter were marked by unusually cooler-than-normal temperatures. August was the third-mildest in the last twenty years, and September was the second-mildest over the same period. As a result, the average high temperature for this year's third quarter was 103.0 degrees - 1.3 percent lower than last year's quarter and 1.2 percent below normal based on a rolling 10-year average. The resulting impact was that residential cooling degree-days (a measure of the effects of weather) were 8 percent worse than last year's third quarter and 6 percent lower than normal 10-year averages.

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