Shares of Dominion Energy Inc. were down more than 3% Nov. 4 after executives said they have launched a “top-to-bottom” review of the business in an attempt to boost its stock performance, which has significantly lagged most of its peers in recent years.
Chairman, President and CEO Bob Blue said the review aims to improve the predictability and quality of Dominion’s earnings streams and that he and his team are looking at possibly making changes to the company’s operations, mix of ventures and how they allocate capital.
“Fundamentally, we took a look at how we’re doing and how our share price is doing,” Blue told analysts on a conference call discussing Dominion’s third-quarter profits of $778 million on revenues of nearly $4.4 billion. “The market is telling us we’re not performing as our investors expect.”
Richmond, Virginia-based Dominion has about 7 million customers in 15 states and, like many of its peers, has outlined large investment plans in decarbonization projects while also selling off some non-core assets. The strategic review could result in more such divestitures as well as various cost cuts but Blue told analysts it’s too early to talk about specifics and said the Dominion team remains focused on its state-regulated utility strategy and on retaining both its credit rating and dividend program while keeping an eye on the broad energy transition.
“We need to ensure that near-term economic and customer bill pressures don't preclude the full realization of that energy transition and related long-term capital investment,” Blue said.
Dominion shares (Ticker: D) have traded in line with its peer group over the past year, falling slightly in line with the utility sector as a whole. But over long periods, it noticeably trails companies such as Duke Energy Corp., Southern Co. and NextEra Energy Inc.: Over the past five years, Dominion is down 17% and it has not recovered from the shock inflicted in early 2020 by the COVID pandemic.
Blue said he expects to provide an update on the business review after Dominion reports its Q4 numbers early next year and also is planning a more in-depth presentation on growth plans later in 2023.
Along with its Q3 results, Dominion also announced that CFO James Chapman will leave the company later this month to become treasurer at oil and gas giant Exxon Corp. Chapman, who has been with Dominion for nearly a decade, will be replaced by Steven Ridge, who has been leading its western gas operations.
