(RTTNews) - Electric utility Pinnacle West Capital Corp. (PNW: News ) said Thursday that its third quarter profit rose from last year, helped by improved mark-to-market valuations of fuel contracts, retail rate increases, warm weather and lower operations and maintenance expenses.

The company, which provides retail and wholesale electric services in Arizona, reported net income for the third quarter of $186.7 million or $1.84 per share, compared to $151.6 million or $1.50 per share for the year-ago quarter.

Excluding results for the company's real estate segment that is being restructured through the sale of a substantial majority of its properties, on-going consolidated earnings for third quarter were $199.1 million or $1.96 per share, compared to $161.1 million or $1.59 per share in the prior year quarter.

On average, 8 analysts polled by Thomson Reuters expected the company to earn $1.75 per share for the third quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the third quarter increased 6.5% to $1.14 billion from $1.07 billion in the same quarter last year.

For the first nine months, the company reported net income of $98.5 million or $0.97 per share, compared to $281.0 million or $2.78 per share for the same period last year.
Total operating revenues for the nine-month period fell to $2.61 billion from $2.64 billion in the prior year period.

Looking forward, the company said it continues to expect on-going consolidated earnings for 2009 to be within a reasonable range around $2.30 per share, excluding the results of its real estate segment.

The company also continues to expect on-going consolidated earnings for 2010 to be within a reasonable range around $3.00 per share, excluding the impacts of its real estate segment.
Analysts currently expect the company to earn $2.30 per share for the full year 2009 and $2.91 per share for the full year 2010.

The company expects customer growth to average about 1% annually through 2011. Additionally, weather-normalized sales are expected to remain relatively flat through 2011 on a year-over-year comparison, due to the effects of APS' energy efficiency programs, and cyclical business conditions related to Arizona's housing market and the national economy.

Pinnacle shares are currently trading at $31.92, down 65 cents or 2%.

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by RTT Staff Writer

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