(RTTNews) - Electric and natural gas utility company Pepco Holdings Inc. (POM: News ), Thursday said its profit for the third quarter increased from last year, as lower expenses helped offset a significant drop in revenue. On an adjusted basis, quarterly earnings decreased over the year-ago, due to increased pension expense and higher interest expense.

The company posted net earnings of $124 million or $0.56 per share for the third quarter, compared to $119 million or $0.59 per share in the prior year quarter.

Excluding special items, earnings would have been $97 million or $0.44 per share for the third quarter of 2009. On average, 6 analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for the quarter. Analysts' estimates typically exclude special items.

Third quarter operating revenue declined to $2.54 billion from $3.06 billion in the same quarter last year.

Power delivery operating revenue fell 14% to $1.43 billion, while Competitive energy operating revenue dropped 20% to $1.10 bln in the previous year quarter.

Power Delivery electric sales were 13,709 gigawatt hours or GWh, compared to 14,050 GWh in the prior year quarter.

Pepco Energy Services had retail electric sales of 4,619 GWh in the third quarter of 2009, down 18% to 5,614 GWh, due to the continuing expiration of existing retail contracts.

Conectiv Energy's total generation output slipped 16% to 1,549 GWh from 1,851 GWh in the third quarter of 2008, due to decreased demand for electricity related to the economic recession and milder weather.
Cooling degree days were 11% lower for the third quarter. Weather-adjusted electric sales were 13,782 GWh in the third quarter of 2009, down from 13,816 GWh in the prior year quarter.

Total operating expenses for the third quarter eased to $2.26 billion from $2.79 billion in the third quarter of 2008.

For the nine-month period of 2009, Pepco Holdings reported net earnings of $194 million or $0.88 per share, compared to $233 million or $1.16 per share in the previous year period.

Excluding special items, earnings fell to $159 million or $0.72 per share from $326 million or $1.62 per share in the prior year period.

Operating revenue for the period declined to $7.12 billion from $8.22 billion in the prior year period.

Pepco Holdings closed Thursday's regular trading session at $14.53, up 15 cents or 1.04% on a volume of 3.29 million shares.

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by RTT Staff Writer

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