We will be maintaining our $55 fair value estimate and stable narrow moat trend for DTE Energy DTE after the company announced first-quarter earnings that were driven higher primarily by much colder weather for both the gas and the electric utilities. During the quarter, DTE earned $1.34 per share versus $0.91 per share for the prior-year period.

While rates at the gas utility and lower benefit expenses at both utilities provided a tailwind as well, roughly $0.21 of the increase in earnings per share was a swing back from a mild winter in Michigan in 2012. The more normal weather also boosted the company’s energy trading business from its first-quarter slump last year, adding another $0.05 of improvement. DTE maintained its guidance for the year of $3.85-$4.15 in EPS, in line with our forecast of $3.98 EPS. Management’s capital expenditure guidance for the year is ahead of our forecast, primarily at DTE Electric and for the Bluestone pipeline, and we will update our projections accordingly.

DTE managed to secure an upgrade for its gas utility this past week with an automatic capex recovery mechanism for certain capital expenditures, lowering the need to come in front of the commission as regularly for rate cases. Though it only covers $400 million of capex through 2017, it will support cash flow transparency and could eliminate some risk of falling returns on equity in today’s incredibly lowinterest- rate environment if DTE Gas can stay out of a formal filing.