(RTTNews) - Electric utility company Allegheny Energy Inc. (AYE: News ), Thursday reported a lower third-quarter profit, hurt by charges and lower results from its generation business, which was affected by weak economy and low power prices. On an adjusted basis, earnings rose from last year and came in above analysts' forecast.

The company's third-quarter net income attributable to the company was $77 million or $0.45 per share, compared with $89 million or $0.52 per share in the same quarter last year.

Adjusted income rose to $100.1 million or $0.59 per share from $91.4 million or $0.54 per share in the prior-year quarter.

The company's adjusted net income for the third quarter of 2009 excluded $19.3 million of pre-tax interest expense related to a debt tender offer and net unrealized pre-tax losses of $18.3 million on economic hedges that do not qualify for hedge accounting. Adjusted net income for the third quarter of 2008 excluded $4 million of unrealized pre-tax losses on economic hedges.

On average, 9 analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.

The Greensburg, Pennsylvania-based company's second-quarter net income attributable to Allegheny Energy was $72.61 million or $0.43 per share.

Commenting on the third-quarter results, Paul Evanson, Chairman, President and Chief Executive Officer of Allegheny Energy, stated, "Adjusted earnings grew in the third quarter due to improved results in our regulated delivery and transmission business. However, the weak economy and low power prices reduced earnings in our generation business."
The company's third-quarter operating revenues totaled $793.7 million, down from $849.6 million in the prior-year quarter. Three analysts had a consensus revenue estimate of $952.14 million for the quarter.

Factors benefiting revenues included higher rates in Pennsylvania, increased cost recovery in Virginia, hedging activity, increased revenue from transmission expansion and increased sales to third parties.

Allegheny also said that adjusted operating revenues decreased by $41.6 million, reflecting reduced generation volume, largely due to weak demand and lower power prices, as well as planned outages to complete the installation of scrubbers at the Hatfield's Ferry power plant.

For the second quarter, the company's revenues were $814.74 million.

Delivery and Services posted operating revenues of $783.5 million, up from $692.7 million last year. Net income increased by $27.2 million, driven by higher cost recovery in Virginia, the elimination of an intercompany transfer payment and higher revenues from transmission expansion. These benefits were partially offset by lower retail electricity sales and higher income taxes, primarily due to an increase in pre-tax income.

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