Allegheny Energy Inc.'s (AYE) third-quarter profit fell 13% on
hedging and debt-buyback costs as earnings topped analysts'
expectations on higher margins.
Utilities have posted third-quarter results hurt by a
cooler-than-expected summer, lower commodity prices and declining
demand amid the economic downturn. Allegheny operates regulated
electric utilities and merchant power plants that sell output at
market prices rather than regulated prices.
Allegheny, which serves customers in some Mid-Atlantic states,
reported earnings of $77 million, or 45 cents a share, down from
$89 million, or 52 cents, a year earlier. Excluding the charges,
earnings rose to 59 cents from 54 cents.
Revenue fell 6.6% to $793.7 million.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 53 cents on $952 million in sales.
Operating margin rose to 25.9% from 22% amid lower fuel
costs.
Generation earnings, hurt by the weak economy and low power
prices, fell 46%, while delivery and services earnings surged to
$31.5 million from $4.3 million on increased rated in Virginia and
the elimination of an intercompany transfer payment.
In September, Allegheny bought back about $150 million worth of
notes that were due in 2011, the latest in a series of buybacks for
the company. The company also issued about $600 million in senior
notes to repay existing debt and buy back the aforementioned
notes.
Shares closed at $25.02 Wednesday and didn't trade premarket
Thursday. They are down 26% this year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;