Earnings Preview: Allegheny Energy

Allegheny Energy (AYE) is expected to report Q4 earnings today with a conference call scheduled for Friday at 8:30 am ET.

Guidance

Analysts are looking for the company to post a Q4 EPS of 48c on revenue of $939.35M. The consensus range is EPS 38c to 62c, and revenue range of $807M to $1.07B, according to First Call.

Backdrop

Allegheny reached a settlement with Merrill Lynch (MER) on January 28 regarding its purchase of Merrill's Global Energy Market trading business in 2001. Under the settlement, Merrill will convey its minority equity interest in Allegheny Energy Supply Company to Allegheny. Allegheny will make a cash payment of $50M to Merrill, and all litigation and claims will be dismissed.

Analyst analysis

BMO Capital rated Allegheny Outperform, citing the company's above-average growth trajectory remaining intact after Q3 results.

Citigroup rated the company Buy, based on confidence in their higher long-term earnings power.