Electric utility firm Progress Energy Inc. (PGN) Monday updated its fiscal 2008 ongoing earnings outlook. The company also provided earnings guidance for fiscal 2009 and lowered its 2009 capital expenditure plan.
Progress Energy now sees earnings per share at the lower end of its previously announced range of $2.95 - $3.05, primarily due to mild weather across the service territories in December and the continuing impact of the slowing economy.
On average, 17 analysts polled by First Call/Thomson financial expect the company to earn $3.01 per share for the full-year 2008. Analysts' estimates typically exclude special items.
Commenting on the outlook revision, Bill Johnson, Chairman, President and Chief Executive Officer of Progress Energy, said, "In the midst of a global economic slowdown, our company is continuing to deliver superior service for our customers, create value for our shareholders and control our costs,".
Johnson also said that 2009 will be a challenging year. For fiscal 2009, Progress Energy expects ongoing earnings per share to be in the $2.95 - $3.15 per range. Meanwhile, analysts expect the company to earn $3.11 per share for the full-year 2009. The company also reduced its planned capital expenditures for 2009 by about $250 million.
Further, Progress Energy said that the ongoing earnings guidance for 2008 and 2009 excludes any impacts from the CVO mark-to-market adjustment, potential impairments and discontinued operations of other businesses. The company is not able to provide a corresponding GAAP equivalent for the 2008 and 2009 earnings guidance figures due to the uncertain nature and amount of these adjustments.
According to the company, the key earnings drivers in 2009 are projected to be revenue growth primarily from new wholesale customers, AFUDC associated with new plant investment, continued cost management and lower depreciation and amortization expenses. These stimulants are expected to be partially offset by higher pension expenses and increased financing costs. In addition, earnings guidance for 2009 reflects adjusted retail revenue expectations due to the slowing economy.
Separately, Progress Energy Florida, or PEF, a subsidiary of Progress Energy, announced the signing of a contract with Westinghouse Electric Company LLC and The Shaw Group Inc.'s Power Group for the construction of two nuclear units for a proposed nuclear power plant in Levy County, Florida.
PEF has purchased about 5,100 acres in southern Levy County for the potential construction of two nuclear reactors and other related facilities. The contract provides equipment, engineering and construction services for two 1,105-net megawatt, or, MWe, AP1000 reactors. The project also includes the finalization joint ownership agreements and the receipt of the Nuclear Regulatory Commission, or NRC, schedule for review and approval of the company's combined license application, or COLA. Current plans would be for the units to be operational in the 2016 to 2018 time frame, the company noted.
PEF also said that a "Determination of Need" petition was unanimously approved by the Florida Public Service Commission, or PSC, in July 2008, supporting the need to meet future energy needs in Florida with nuclear power. A second filing, a Site Certification Application, or SCA, was filed with the Florida Department of Environmental Protection in June 2008, with a decision on the filing expected this year.
Further, PEF said that the majority of the project's costs will be invested by the company and its shareholders, and will not be recovered from customers through rates until the plant goes in service. However, starting this month, customers will begin paying for a portion of the costs of the project as approved by the PSC.
In addition, PEF noted that the building of the new plant will generate employment for at least 3,000 people at the peak of construction. Once the units are in operation, it will generate a minimum of 800 full-time, high-wage positions as well as an additional 1,200 indirect jobs.
Among Progress Energy's peers, Dynegy Inc. (DYN) on November 6 said that its now expects 2008 GAAP net income of $195 million, compared to its prior estimate of $110 million to $170 million. The company also lowered its adjusted earnings before interest, tax and amortization outlook to $840 million from its prior estimate of $955 million.
FPL Group, Inc. (FPL) said in October that it expects adjusted earnings per share to come in at the lower end of its prior estimated range of $3.83 - $3.93, assuming normal weather and no further material decline in the Florida economy. For 2009 and 2010, FPL reaffirmed its adjusted earnings per share guidance of $4.05 - $4.25 and $4.50 - $4.90, respectively. In light of the current economic and credit environment, the company reduced its 2009 capital-spending forecast to approximately $5.3 billion from its prior estimate of about $7 billion. In addition, FPL plans to reduce its 2009 capital expenditures by approximately $400 million for projects associated with system growth that is no longer expected.
PGN is trading at $40.35, down $0.30, on a volume of 409,185 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.