Friday, electricity transmission company ITC Holdings Corp. (ITC) raised its guidance for fiscal 2009 and 2010, gaining strength from favorable debt financings for ITC Holdings and ITC Midwest.
For fiscal 2009, ITC now expects earnings per share in the range of $2.55 to $2.60, including $0.11 associated with the recognition of regulatory assets at ITC Great Plains. The company attributed the increase in guidance from the prior range of $2.47 to $2.52 to the expectation that capital expenditures will be at the high end of the existing guidance of $320 million to $345 million and lower non-recoverable expenses.
On average, four analysts polled by Thomson Reuters currently estimate earnings of $2.50 per share for fiscal 2009. Analysts' estimates typically exclude special items.
For fiscal 2010, the company estimates earnings per share in the range of $2.60 to $2.70, up from the previous guidance of $2.52 to $2.62 per share. The higher guidance is primarily driven by the impact of lower-than-forecasted interest expense resulting from the favorable ITC Holdings financing. Analysts, on average, currently expect earnings of $2.60 for fiscal 2010.
Further, the company also reaffirmed its fiscal 2010 capital expenditure guidance, which is in the range of $405 million to $460 million. In September, the company had unveiled a five-year capital expenditure plan of about $3 billion, which is projected to increase ITC's consolidated rate base from about $2.1 billion at the end of 2008 to about $4.5 billion at the end of 2014.
Joseph Welch, chief executive officer of ITC, said, "We are very pleased with the successful execution of our debt financings for both ITC Holdings and ITC Midwest. These offerings further support our confidence in our ability to effectively capitalize the investments in our transmission systems detailed in our five year plan. For ITC Holdings in particular, not only does the recent financing eliminate the near term interest rate risk associated with necessary financings in 2010 and 2011, it also essentially satisfies our holding company financing needs through 2012."
For the recent third quarter, ITC reported an increase in profit on lower operating expenses despite a decline in revenue. Net income for the third quarter increased to $37.82 million or $0.74 per share from $28.05 million or $0.55 per share a year ago. Operating revenues decreased to $151.33 million from $163.28 million in the prior-year quarter.
In Friday's morning session, ITC is gaining $0.55 or 1.07%, and is trading at $51.96 on a volume of 235 thousand shares on the New York Stock Exchange.
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