Thursday, Dominion Resources Inc. (D) reported a decline in fourth quarter earnings, on a substantial drop in revenues. The decrease in fourth-quarter operating earnings was primarily due to higher outage costs, unfavorable weather in the regulated electric service territory and higher depreciation and amortization expenses.
Partially offsetting the negatives were higher contributions from the regulated electric utility and gas transmission businesses, higher contributions from unregulated retail energy marketing operations and lower income taxes.
Earnings for the fourth quarter declined to $165 million from $348 million year-ago period. Earnings per share for the quarter declined to $0.28 from $0.60 per share in the year-ago period.
The company's operating earnings declined to $374 million from $424 million a year-ago. Operating earnings per share declined to $0.63 per share from $0.73 per share in the year-ago period.
On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.60 per share for the quarter. Analysts' estimates typically exclude special items.
According to the Richmond, Virginia-based company, operating revenue declined by $905 million to $3.26 billion from $4.17 billion in the year-ago period. Five Wall Street analysts estimated a revenue of $4 billion for the quarter.
Thomas F. Farrell II, chairman, president and chief executive officer, said, "Our core businesses delivered solid operating earnings results in 2009 despite challenging economic conditions in many of the markets we serve. Driven by the performance of our gas transmission operations, as well as lower financing costs and lower income taxes, our 2009 operating earnings landed in the upper half of our guidance range.
The company in the Generation segment increased the total generating capacity by 1.5%, or 417 megawatts, through a combination of new generation and uprates of existing generating facilities. Also, it made significant construction progress on two large generating facilities, Virginia City Hybrid Energy Center and Bear Garden, which will supply Virginia with 1,175 megawatts once both are in operation by 2012.
At the Energy segment, the company's Cove Point Expansion project was placed into service, nearly doubling the size of our LNG importation facility. Additionally, the USA Storage Project went into full commercial operation. Dominion also announced the Appalachian Gateway Project, which would ensure market access for the participating Appalachian producers by firming up their transportation rights. In its Appalachian E&P operations, the company drilled more than 300 new wells without any dry holes.
In the Dominion Virginia Power segment, the company made significant investments in reliability, including completing over 400 miles of circuit reconditioning across Virginia and North Carolina. On the transmission front, it made considerable progress on the 500 kV Meadow Brook to Loudoun and Carson to Suffolk electric transmission line projects, which are on track to be in-service by mid-year 2011.
The company affirmed its 2010 operating earnings guidance of $3.20 to $3.40 per share and said it would be in a better position to provide details for 2010 after obtaining a final order in the Virginia base rate case proceeding.
Dominion expects first-quarter 2010 operating earnings in the range of $0.90 per share to $1.00 per share.
The company's the board of directors affirmed the dividend policy to achieve a 55% payout ratio by 2010. The board also set a 2010 dividend rate of $1.83 per share of common stock, up from $1.75 per share in 2009, a 4.6% increase.
On January 28, 2010, market rival American Electric Power Co., Inc. reported a 57% year-over-year surge in profit for the fourth quarter, helped by rate increases across its service area, cost cutting as well as revenue growth, partially offset by weak industrial demand amid the economic downturn.
Full year reported earnings declined by $373 million to $1.46 billion from $1.83 billion a year-ago. Earnings per share for the fiscal year declined to $2.46 per share from $3.16 per share in the year-ago period.
Operating earnings for the fiscal year increased to $1.94 billion from $1.84 billion in the year-ago period. Operating earnings per share increased to $3.27 from $3.16 per share a year-ago.
Full year operating revenue declined to $15.144 billion from $16.29 billion in the year-ago period.
The Street estimated earnings of $3.24 per share on revenue of $15.71 billion for the year.
D closed Thursday's last trade at $37.60, down $0.40 or 1.05% on a volume of 3.12 million shares on the New York Stock Exchange.
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