Korea Electric Power (NYSE:KEP) Releases Quarterly Earnings Results, Misses Estimates By $0.40 EPS

Key Points

• Korea Electric Power reported $0.13 in quarterly EPS, missing the $0.53 analyst consensus by $0.40, while revenue of $14.15 billion also fell short of the $14.88 billion estimate.
• First-half operating profit reached KRW 4.9 trillion and net income KRW 2.8 trillion, but weaker industrial demand reduced power sales, while weak nuclear output and higher LNG prices could pressure third-quarter results.
• Shares fell 4.3% to $11.77, and analysts have a “Reduce” consensus after several downgrades, with tariff increases still under consideration to address accumulated losses and improve leverage.

Korea Electric Power (NYSE:KEP - Get Free Report) announced its quarterly earnings results on Wednesday. The utilities provider reported $0.13 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.53 by ($0.40), FiscalAI reports. Korea Electric Power had a net margin of 8.95% and a return on equity of 18.25%. The business had revenue of $14.15 billion for the quarter, compared to analysts' expectations of $14.88 billion.

Here are the key takeaways from Korea Electric Power's conference call:

• KEPCO reported KRW 4.9 trillion in first-half operating profit and KRW 2.8 trillion in net income. Revenue rose 0.3% year over year, while lower purchased-power costs and reduced interest expense helped offset higher fuel and operating costs.
• Power sales volume declined 0.6% to 266.7 TWh in the first half as industrial demand weakened amid an economic slowdown. KEPCO expects full-year sales to increase slightly as economic growth and operating days improve.
• Nuclear generation remained weak because of prolonged preventive maintenance, while higher LNG prices linked to the Middle East conflict contributed to greater coal generation. Rising SMP in July and August also suggests continued fuel-cost pressure in the third quarter.
• KEPCO said tariff increases would help address accumulated losses and meet the goal of bringing the bond-to-capital ratio below two times by the end of 2027, but no timing was provided. A regional electricity-pricing system is expected to be finalized and introduced by year-end, with financial impacts still undisclosed.

Korea Electric Power Stock Down 4.3%

Shares of KEP stock traded down $0.53 during midday trading on Wednesday, reaching $11.77. 1,012,286 shares of the stock were exchanged, compared to its average volume of 904,818. Korea Electric Power has a 1 year low of $11.25 and a 1 year high of $23.41. The firm has a market cap of $15.11 billion, a PE ratio of 2.46, a price-to-earnings-growth ratio of 2.11 and a beta of 0.95. The company's 50 day moving average is $12.24 and its two-hundred day moving average is $15.22. The company has a current ratio of 0.43, a quick ratio of 0.29 and a debt-to-equity ratio of 1.56.

Institutional Investors Weigh In On Korea Electric Power

Several hedge funds have recently made changes to their positions in KEP. Smartleaf Asset Management LLC boosted its holdings in shares of Korea Electric Power by 21.6% during the 4th quarter. Smartleaf Asset Management LLC now owns 2,625 shares of the utilities provider's stock valued at $44,000 after buying an additional 466 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC bought a new position in shares of Korea Electric Power in the 4th quarter worth about $45,000. Barclays PLC purchased a new position in Korea Electric Power during the 4th quarter valued at about $45,000. Osaic Holdings Inc. lifted its position in Korea Electric Power by 1,144.4% during the 2nd quarter. Osaic Holdings Inc. now owns 3,447 shares of the utilities provider's stock valued at $49,000 after acquiring an additional 3,170 shares during the period. Finally, Wells Fargo & Company MN lifted its position in Korea Electric Power by 155.3% during the 4th quarter. Wells Fargo & Company MN now owns 3,585 shares of the utilities provider's stock valued at $59,000 after acquiring an additional 2,181 shares during the period.

Analysts Set New Price Targets

KEP has been the topic of several research analyst reports. Morgan Stanley cut Korea Electric Power from an "equal weight" rating to an "underweight" rating in a research note on Tuesday, May 19th. Weiss Ratings cut shares of Korea Electric Power from a "buy (b)" rating to a "hold (c+)" rating in a report on Wednesday, May 27th. Finally, Zacks Research downgraded shares of Korea Electric Power from a "hold" rating to a "strong sell" rating in a research report on Monday, July 13th. Two equities research analysts have rated the stock with a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat.com, Korea Electric Power currently has an average rating of "Reduce".

Korea Electric Power Company Profile

Korea Electric Power (KEP) is a South Korea–based integrated electric utility engaged in the generation, transmission and distribution of electricity. The company's activities span power plant operation and maintenance, grid management, fuel procurement and power trading, as well as engineering, procurement and construction (EPC) services for large-scale power projects. Its asset base includes a mix of thermal, nuclear, hydro and renewable generation capacity, and the company supports system planning and reliability functions for the national electricity network.

In addition to core utility operations, KEP provides a range of technical and consulting services tied to power infrastructure, including plant construction, refurbishment and decommissioning support.

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