Allegheny Energy Inc. (AYE) reported first quarter 2010 net income of $88.2 million or $0.52 per share, compared to $133.9 million or $0.79 per share in the year-earlier quarter. The decrease in year-over-year earnings was primarily due to certain non-recurring items.

Excluding the one-time items, earnings of Allegheny Energy for first quarter 2010 were $102.9 million or $0.61 per share, compared to $114.1 million or $0.67 per share in the year-ago quarter. Earnings missed the Zacks Consensus Estimate of $0.70 for the quarter.

Allegheny Energy’s adjusted operating revenues of approximately $1.1 billion in the reported quarter increased by about $135.0 million year-over-year. This was largely due to increased transmission expansion and capacity revenues, power hedges and higher rates in West Virginia for fuel and purchased power costs, partially offset by lower power prices.

During the quarter, fuel expenses increased by $58.9 million due to higher coal prices, increased generation output and higher costs associated with new scrubber operations. In addition, purchased power costs also increased by $15.0 million, primarily due to increased purchases from third parties to serve Maryland and Virginia customers.

Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) during the quarter was $324.9 million compared to $328.2 million in the year-ago period — a decrease of $3.3 million.

In the Merchant Generation segment, Allegheny Energy’s adjusted net income in the reported quarter decreased by $9.1 million to $51.0 million. This was due to lower market prices and higher fuel costs, partially offset by power hedges and increased capacity revenues.

In the Regulated Operations segment, Allegheny Energy’s adjusted net income in the reported quarter decreased by $2.1 million to $51.7 million. The year-over-year decrease was primarily due to higher operations and maintenance expense resulting from storm restoration efforts, partially offset by increased retail sales and higher revenue from transmission expansion.

At quarter end, Allegheny Energy had cash and cash equivalents of $185.9 million, and long-term debt of $4.4 billion.
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