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Electric and natural gas utility company Pepco Holdings Inc. (POM), Thursday said its second quarter profit increased from last year, as mild weather and lower customer usage hit sales along with higher operation and maintenance expense.
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| | | {loadposition contentad} | | | | | The continuing economic crisis has forced people to be more prudent in their electricity usage and weakened consumer demand. The weather also play a key role in determining electricity usage, as cooler weather translates to less use of electricity.
Among others in the industry, Public Service Enterprise Group Inc. (PEG) reported a profit for the second quarter over a loss last year, helped by higher contracted pricing and lower fuel costs at the PSEG Power segment even as it continued to deal with lower demand. In addition, the year-ago period's results include a lease-related charge.
Another peer, Allegheny Energy Inc. (AYE) reported its second-quarter profit declined by 53% over last year, as the company reported sharply lower hedging gains in the period, while operating revenues had a year-over-year drop of 15%.
The Washington, District of Columbia-based Pepco posted consolidated earnings of $25 million or $0.11 per share for the second quarter, compared to $15 million or $0.07 per share in the prior year quarter.
Excluding items, earnings would have been $108 million or $0.53 per share for the second quarter of 2008. There were no special items in the second quarter of 2009.
On average, 5 analysts polled by Thomson Reuters expected the company to earn $0.24 per share for the second quarter. Analysts' estimates typically exclude one-time items.
Second quarter operating revenue declined to $2.07 billion from $2.52 billion in the same quarter last year.
"During the quarter, the demand for power was dampened significantly by recessionary pressures and mild weather, and the energy markets continued to be challenging," said Joseph Rigby, chairman, president and chief executive officer.
Total electric operating revenue slipped to $1.06 billion from $1.21 billion, while total power delivery operating revenue dropped to $1.10 billion from $1.30 billion in the previous year quarter.
Conectiv Energy posted an operating loss of $18 million for the second quarter, compared to operating earnings of $41 million a year ago.
Conectiv Energy's total generation output was 610 gigawatt hours or GWhs in the second quarter, down 44% from 1,094 GWhs in the previous year quarter, due to lower demand for electricity related to the economic recession and mild weather.
Power Delivery operating income for the quarter decreased to $100 million from $153 million in the year-ago quarter. Power Delivery electric sales fell to 11,323 GWhs from 12,122 GWhs in the corresponding quarter of 2008.
Pepco Energy Services' operating income for the quarter grew to $29 million from $25 million a year ago. Pepco Energy Services had retail electric sales of 4,594 GWhs, down 5% from 4,825 GWhs in the year-ago quarter, reflecting lower commercial and industrial customer loads.
Total operating expenses for the second quarter eased to $1.94 billion from $2.40 billion in the prior year quarter.
For the first-half of 2009, consolidated earnings were $70 million or $0.32 per share, down from $114 million or $0.57 per share in the previous year period.
Excluding special items, earnings plunged to $62 million or $0.28 per share from $207 million or $1.03 per share in the prior year period.
Total operating revenue decreased to $4.59 billion from $5.16 billion in the year-ago period.
Pepco Holdings shares closed Thursday's regular trading session at $14.24, up 24 cents, on a volume of 1.89 million shares. In after-hours, the share lost 9 cents.
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