Well our current concern with the earnings of Spark Energy (NASDAQ:SPKE) is alleviated as the company reported earnings that were so-so. The company is still being dogged by the weather and the cost of hedging electrical supplies–but as a preferred stock investor we are less concerned that the company have stellar earnings–and more concerned that they simply are performing in a manner that has plenty of cash flow to pay the preferred stock dividends.
The company reported earnings of $23.9 million for the quarter ending 6/30 with 26.9% growth in retail customer counts. Unfortunately the retail gross margin is just $15.54 per megawatt hour compared to $25.28 last year as the cost of hedging played havoc with margins.
Regardless of just barely acceptable earnings at least they were not the feared disaster. Given that the preferred shares sold off 2% since we wrote on Tuesday we would think that shares would be relatively stable from here, but we shall observe and decide on the path forward when we see some price action.