Monday, Portland General Electric Company (POR), a subsidiary of Portland General Corp., reported a decrease in profit for the second quarter, hurt mainly by decline in retail energy deliveries and sale of excess power into low-priced wholesale markets.
For the quarter, net income attributable to the company was $24 million or $0.31 per share compared with $39 million or $0.63 per share in the prior-year quarter.
On an average, eight analysts polled by Thomson Reuters expected Portland to earn $0.37 per share. Analysts' estimates typically exclude special items.
Decline in retail energy deliveries, resulting from both a slow economy and mild weather, along with the sale of excess power into low-priced wholesale markets dragged down the net profit. "Also contributing to the decrease in net income was the effect of estimated customer refunds recorded in the second quarter of 2009 related to Senate Bill 408 (SB 408) due to lower expected earnings," the company said.
The Portland, Oregon-based company's revenues for the quarter slid to $389 million from $425 million in the second quarter of 2008. Analysts' expected Portland to generate revenues of $425.94 million during the quarter.
Jim Piro, president and chief executive officer of Portland General, said, "The national recession continues to impact Oregon's economy and, as a result, we saw a decline in retail energy deliveries, primarily in our industrial customers' electricity use. In addition, a depressed wholesale energy market made it difficult to offset reduced revenue with the sale of excess power."
During the quarter, Portland General's total energy sold and delivered were 5.07 million MWhs compared with 5.43 million MWhs. Retail energy sales decreased to 3.92 million MWhs from 4.14 million MWhs and retail energy deliveries were 4.39 million MWhs as against 4.75 million MWhs in the year-ago quarter.
The company's total retail customers for the second quarter were 817,473 compared with 813,038 in the corresponding period previous year.
For the six-month period, net earnings declined to $55 million or $0.77 per share from $67 million or $1.07 per share in the comparable period prior year. Revenues for the half year were $874 million as against $896 million in the same period last year.
Looking ahead, Portland General expects full year earnings, as revised on July 22, to be between $1.35 and $1.45 per share. Analysts expect the company to earn $1.50 per share on revenues of $1.74 billion for the full year.
Portland also anticipates capital expenditures for the year to be $720 million and in 2010 to be $520 million, and expects long-term average annual earnings growth of 6% to 8% starting from 2010 earnings results.
POR closed Friday's regular trading at $19.03 per share on the New York Stock Exchange.
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