Weather extremes boost BGE 1995 earnings rose 5% to $297 million

January 20, 1996|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Fueled by an excruciatingly hot summer and a cool fall, the Baltimore Gas and Electric Co. yesterday reported that its 1995 earnings rose 5 percent to $297.4 million.

The power concern's revenues for the year climbed as well, to $2.9 billion, a 5.4 percent increase brought about by slightly higher electricity and natural gas sales to both residential and commercial customers.

"It was a satisfying year marked by extremes of weather," said Kevin J. Miller, BGE's director of financial planning. "The first half was a bit disappointing, but we're very satisfied with a year in which we were able to hold the line on expenses to offset some costs from both known and unknown reserves."

Total electric sales increased 2.7 percent during 1995, while natural gas sales rose 2 percent.

BGE's performance in the fourth quarter of last year was even more impressive, with earnings applicable to common stock of $42.5 million, or 29 cents per share, an 11 percent gain. Revenue in the quarter ended Dec. 31 soared by 19 percent, to $725.7 million.

The fourth-quarter earnings increase occurred because it was 28 percent colder than in the final three months of 1994, according to the National Weather Service.

"Their electric operations were a little better than expected, while results from the gas side's sales were a little less than we had thought," said Ronald S. Tanner, a Legg Mason Wood Walker Inc. analyst who tracks BGE.

BGE did incur $4 million in unusual reserves and expenses in the fourth quarter, however, resulting from costs relating to its pending merger with the Potomac Electric Power Co. and a severance package for executives slated to leave the company once the $2.9 billion transaction is completed.

Without the costs, BGE's fourth-quarter earnings would have been roughly 2 cents per share higher, Mr. Miller said.

"Generally, the earnings gains being posted by other utilities are pretty much on par with that of BGE," said Alex Hart, a Ferris, Baker Watts Inc. utility analyst.

BGE President and Chief Operating Officer Edward A. Crooke, in a prepared statement, also attributed the earnings increase to production gains at its fossil fuel plants, its Calvert Cliffs nuclear power plant and its gas rate increase which went into effect Nov.

20. The higher rate is expected to generate an additional $16.9 million annually in gas revenues.

Calvert Cliffs generated a record 12.9 million megawatt-hours of electricity in 1995, a 7.5 percent increase over the previous year.

For the second consecutive year, the company's $2.02 in earnings per share in 1995 were helped by an increased contribution from Constellation Holdings Inc., the company's nonutility subsidiary that is involved in investments, real estate development, alternative energy sources and health care.

Constellation and other diversified businesses contributed 18 cents a share to BGE's earnings for the year, a 50 percent jump from 1994 and 125 percent better than its performance two years ago.

"The utility and diversified businesses were both up, and the weather balanced out for them throughout the year," said Barry M. Abramson, a Prudential Securities utility analyst. "Overall, they had a pretty good year."

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