Lower earnings in the second quarter of 2020 were reported Thursday by OGE Energy Corp., the parent company of Oklahoma Gas and Electric Company. The drop in earnings appears to have been driven by the firm’s part ownership of Enable Midstream, a firm with lower revenue due to the COVID-19 pandemic.
Earnings were 43 cents per diluted share for the quarter compared to 50 cents a share a year earlier. OGE Energy’s net income was approximately $86 million in the second quarter, compared to approximately $100 million in the year-ago quarter. OGE Energy’s ongoing earnings were $102 million or $0.51 per share in the second quarter of 2020.
“Strong financial and operational execution at the utility highlighted the second quarter of 2020, and we remain on plan for the year,” said OGE Energy Corp. Chairman, President and CEO Sean Trauschke. “Looking to the second half of the year, we expect to resume our grid enhancement plan at the Oklahoma Corporation Commission as well as continue to support our customers as we implement our COVID-19 response.”
OGE, a regulated electric utility contributed earnings of 39 cents a share in the second quarter, two cents higher than the second quarter of 2019. Its net income was approximately $79 million in the second quarter, compared to approximately $75 million in the comparable quarter last year. The primary driver for the increase in net income was the recovery of additional assets placed into service, partially offset by higher depreciation and interest expense.
OGE Energy Corp. is a holder of 25.5 percent limited partner interest and 50 percent general partner interest in Enable Midstream Partners LP. The company’s natural gas midstream operations contributed net income of approximately $19 million compared to $27 million for the same quarter of 2019
The decrease was driven by lower net income from Enable’s gathering and processing business resulting from reduced natural gas and crude oil gathered volumes and natural gas processed volumes. In addition, Enable Midstream issued cash distributions to OGE of approximately $18 million in the second quarter of 2020 compared to $35 million in 2019.
Despite the drop in earnings, the company said its 2020 earnings outlook is unchanged with an expected earnings total between $1.72 and $1.78 per average diluted share. The guidance projects an anticipated net loss of $173 million to $154 million.
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