Philippines News: FREE

Get an edge on the Philippine Stock Market in this comprehensive tool for Filipinos and foreign investors.
Get it on Google Play

Thursday, April 10, 2014

MER: Meralco 1Q14 earnings down y/y

Meralco 1Q14 earnings down y/y. Meralco said it posted lower profits during 1Q14 from the same period last year. The company said that sales volume were softer given the lower temperature, but it expects demand to pick up beginning 2Q14. No other details for 1Q14 were disclosed.

Ex-provisions, we expect MER’s profit for FY14E to grow by 9.2% brought about by a 4% increase in sales volume and the first time earnings contribution from RES. Despite the disappointing 1Q14, sales volume could still catch up beginning 2Q14 as we expect demand to rise during the peak summer months.

Maintain HOLD rating with FV estimate of Php252/sh. We reiterate our HOLD rating on MER with a FV estimate of Php252/sh. Although the near term earnings growth outlook remains positive, we are concerned with the expected drop in earnings beginning in July 2015 once tariffs are reduced in the next regulatory period. Furthermore, the stock’s valuation is not attractive as there is no potential upside to our fair value estimate of Php252/sh.

Source: Col Financial

No comments:

Post a Comment