BGE's profit soars 47 percent Second-quarter figure aided by hot weather, company says

Utilities

July 18, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

Baltimore Gas and Electric Co.'s earnings in the second quarter soared 47 percent above their 1997 level, to $57.4 million from $39 million, the company reported yesterday.

The utility attributed the gain -- 39 cents per common share vs. 27 cents per share a year ago -- primarily to hot weather that kept Baltimore air conditioners humming throughout the month of June.

The performance surprised Wall Street, shattering analysts' expectations, which predicted the company's earnings would come in at 30 cents per common share.

"BGE's utility operations are off to a good start in 1998," said Frank O. Heintz, a BGE executive vice president in charge of the company's power generation, distribution and transmission operations.

"We're pleased to see that our continuing cost control efforts and higher electric sales volumes during the second quarter have led to improvements in both our second quarter and led to year-to-date financial results."

Revenue in the quarter that ended June 30 rose to $767.6 million, a 3 percent increase from $746.4 million for the same three-month period a year ago.

For the first six months of 1998, BGE generated earnings of $131.8 million, a 14.4 percent increase over the $115.2 million from the first half of 1997. On a per share basis, BGE's earnings of 89 cents per common share also topped the 78 cents of a year ago by 14 percent.

Total electric sales to customers rose just 2 percent in the first half of this year, while a mild winter clipped the utility's natural gas sales by 10 percent.

Revenue in the first six months of 1998 amounted to $1.63 billion, flat from the comparable 1997 period.

Also flat in the second quarter and first half were results from BGE's diversified and unregulated businesses, which include power marketing and brokerage firm Constellation Power Source and an investments subsidiary, among others.

Combined, the diversified businesses contributed 5 cents per share to BGE's earnings, up a penny from last year. In the first half of 1998, income from the unregulated activities actually fell slightly, to 14 cents per share vs. 16 cents per share in the opening half of 1997.

Revenue from those operations rose slightly in both the quarter and the first half, however, to $160.4 million and $346.8 million, respectively.

BGE also yesterday boosted its board to 14 members, naming retired Adm. Charles R. Larson as a director.

Larson, 61, retired in June as superintendent of the Naval Academy, where he graduated in 1958.

"With more than 14 years in command at the highest levels of the military, the depth and breadth of Admiral Larson's leadership, management and strategic planning experience is well renowned and respected," said BGE Chairman and Chief Executive Christian H. Poindexter, who graduated from the academy in 1960.

BGE's common stock rose 12.5 cents yesterday to close at $31.375 cents.

Pub Date: 7/18/98

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