Electric utility Wisconsin Energy Corp. (WEC) reported Thursday an increase in second-quarter profit that surpassed analysts' estimate, despite a decline in revenues.
The company noted that results were helped by cost reductions that were implemented across every segment of the business and by additional earnings from its "Power the Future" plan, including the new Port Washington generating unit that began commercial service in May of last year.
For the second quarter, net income rose to $63.7 million or $0.54 per share from $58.0 million or $0.49 per share in the previous year.
In the latest quarter, Wisconsin Energy reversed a charge of $0.05 a share that was taken earlier this year expecting a leveling of costs from the Midwest wholesale power market.
Excluding the item, earnings totaled $0.49 a share, flat with the year-ago results. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share in the second quarter. Analysts' estimates typically exclude special items.
Operating revenues for the quarter dipped to $842.5 million from $945.4 million. Three analysts were expecting revenue of $1.03 billion in the second quarter.
Wisconsin Energy revealed that consumption of electricity by large commercial and industrial customers shrank 21.8%, and use of electricity by small commercial and industrial customers dipped 5.4%, while residential use of electricity crept up by 0.2% from the prior-year quarter.
Gale Klappa, Wisconsin Energy's chief executive added, "In addition, we were able to reduce our electricity prices during the second quarter to reflect lower fuel costs. In fact, our retail customers paid $103 million less for electricity and natural gas during the second quarter this year as compared to the second quarter last year,"
Total operating expenses reduced sharply to $778.4 million from $924.5 million. Fuel and purchased power costs decreased to $253.6 million from $298.1 million, while cost of gas sold slid to $102.0 million from $185.5 million and other operation and maintenance expenses came down to $308.3 million from $333.3 million in the comparable quarter last year.
For the first six months of fiscal 2009, net income surged to $205.2 million or $1.74 per share from $181.2 million or $1.53 per share last year. Revenues declined to $2.24 billion from $2.38 billion in the same period in fiscal 2008.
Looking ahead, the company said that the earnings guidance for the full year remains in the range of $3.05 to $3.15 per share. This outlook assumes that retail electric sales will decline by about 8.5% in 2009 from the past year. Analysts expect the company to earn $3.10 per share for 2009.
WEC closed Wednesday's regular trading hours at $42.76 on the NYSE.
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