Allegheny Energy's earnings fall 35% after deregulation-related charges

January 27, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Allegheny Energy Inc. said yesterday that fourth-quarter earnings fell 35 percent, largely because of charges related to the deregulation of Maryland and Pennsylvania's power market.

The Hagerstown-based company, which operates in Western Maryland as Allegheny Power, reported net income of $24.8 million in the quarter that ended Dec. 31, compared with net income of $38.2 million in 1998.

Allegheny Energy made 22 cents per share in the quarter, compared with 31 cents per share in the corresponding period in 1998. Revenue rose 27 percent, to $733.7 million, from $576.7 million a year ago.

Excluding extraordinary and other charges, Allegheny Energy's net income for the fourth quarter was $73.6 million, or 66 cents per share, compared with $71.8 million, or 58 cents per share, in the year-earlier period.

"These strong results demonstrate that Allegheny Energy continues to make progress in implementing our high-level strategy to grow our energy-generation and distribution business, while seeking new opportunities related to our core business and strengths," said Michael P. Morrell, the company's senior vice president and chief financial officer.

Extraordinary and other charges amounted to $48.7 million in the fourth quarter. Electric industry restructuring in Maryland and Pennsylvania amounted to a charge of $16.9 million.

Last month, the Maryland Public Service Commission approved an electric deregulation settlement for Allegheny Energy Inc. that gives customers a seven-year 7 percent rate cut starting in 2002.

Annual net income jumped to $258.4 million, or $2.22 cents per share, compared with a loss of $12.4 million, or 10 cents per share, in 1998. Revenue for the year jumped 7.7 percent to $2.8 billion.

Allegheny Energy's stock closed yesterday at $27.6875, up 37.5 cents.

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