Electric utility company Pinnacle West Capital Corp. (PNW) Friday reported a loss for the fourth quarter, compared with a profit a year ago, dented by impairment charges related to its real estate subsidiary, SunCor.
The Phoenix, Arizona-based Pinnacle is engaged in the generation, transmission, and distribution of electricity through various fuels, and provides retail and wholesale electric services. The company is also engaged in real estate development and investment activities in the western U.S.
The company's fourth-quarter net loss was $38.85 million, or $0.39 per share, compared with net income of $2.91 million, or $0.03 per share, last year. The current-year quarter results included real estate impairment charges of $32.5 million, net of tax, for SunCor, the company's real estate subsidiary.
Loss from continuing operations was $48.7 million, or $0.48 per share, versus income from continuing operations of $4.47 million, or $0.04 per share, in the same quarter last year.
Analysts polled by Thomson Reuters expected the company to report a loss of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Pinnacle West also said that its principal subsidiary Arizona Public Service, or APS, reported fourth-quarter net loss of $16.4 million, compared with net income of $0.3 million a year ago. The utility's 2008 results were negatively impacted by higher expenditures for continuing infrastructure additions and improvements and lower mark-to-market valuations of fuel and purchased power contracts.
Pinnacle West's total operating revenues were $686.42 million in the quarter, up from $709.07 million last year. Three analysts had a consensus revenue estimate of $694.35 million for the quarter.
For the sequentially preceding quarter, Pinnacle's earnings were lower than the prior-year quarter, due to summertime temperatures and rising costs in Arizona Public Service. The company reported third-quarter net income of $151.59 million, or $1.50 per share, on revenues of $1.08 billion.
Business wise, the company's regulated electricity segment generated sales of $634.76 million, compared with $627.096 million in the previous year. Real estate segment's revenues plunged to $27.48 million from $40.92 million in the same quarter last year. Marketing and trading revenues were $9.27 million, lower than $29.15 million in fiscal 2007. Other revenues totaled $14.91 million, up from $11.91 million a year earlier.
For fiscal 2008, Pinnacle West reported consolidated net income of $242.1 million, or $2.40 per share, compared with net income of $307.1 million, or $3.05 per share, a year ago. Full-year operating revenues rose to $3.37 billion from $3.32 billion in fiscal 2007. Wall Street analysts projected full-year earnings of $2.43 per share on revenues of $3.74 billion.
Pinnacle's rival Southwest Gas Corp. (SWX) is expected to report fourth-quarter earnings of $1.01 per share, according to the Wall Street analysts. They also forecast revenues of $477.60 million for the quarter. For the third quarter, Southwest Gas reported a net loss of $16.7 million, wider than a loss of $9.3 million in the prior-year quarter. Quarterly operating revenues of $374.4 million were higher than last year's $371.5 million.
Another peer Unisource Energy Corp.'s (UNS) fourth-quarter earnings per share are estimated by analysts to be $0.31 on revenues of $295.38 million. The company's third quarter net loss was $11 million, or $0.31 per share, compared with a net income $25 million, or $0.66 per share, in the year-ago quarter. Total operating revenues declined to $387.85 million from $398.20 million last year.
PNW is trading at $29.01, down $1.58, on a volume of 488,371 shares. On January 31, Lehman Brothers upgraded Pinnacle's shares to Equal-weight from Underweight.
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