Wisconsin Energy Corp.
(WEC) reported first quarter 2010 operating earnings of $1.10 per share, above the Zacks Consensus Estimate of $1.03 but below year-ago earnings of $1.20. The year-over-year decline in earnings growth is attributed to the under-recovery of electric fuel and purchased power costs, compared to last year’s first quarter.
Net revenue in the quarter declined 10% year over year to $1.26 billion, driven by mild winter temperatures and lower natural gas costs. This compares to net revenues of $1.40 billion reported last year.
During the quarter, the company’s retail electricity sales improved 0.3% year over year, driven by an increased use of electricity by commercial and industrial customers. Commercial and industrial electric sales improved 7.8% in the quarter, due to improving economic activity in three sectors of the economy – iron ore mining, specialty steel and paper production. However, electricity use by residential customers declined 3.6% due to mild winter weather.
The number of customers served by Wisconsin Energy’s utilities continued to grow during the quarter. At the end of March, the company was serving 3,700 more electric customers and 4,300 more natural gas customers than a year ago.
The company remained focused on reducing its operating expenses during the quarter. Total operating expenses in the quarter declined 11.6% year over year. In the reported quarter, cost of gas sales was $355.8 million (down 29%) and depreciation, decommissioning & amortization expense was $75.2 million (down 12%), while fuel and purchased power expenses totaled $277.9 million (up 4%) and other operating and maintenance expenses were $339.7 million (up 2%).
As of March 31, 2010, Wisconsin Energy’s cash in hand totaled $12.8 million and long-term debt totaled $4.4 billion. The company’s cash from operating activities at quarter-end was $303.7 million compared to $20.3 million in the year-ago quarter.
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