Allegheny earnings dip 28% in quarter

Energy company cancels IPO, notes poor economy

February 01, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Allegheny Energy Inc. reported yesterday a 28 percent decrease in fourth-quarter earnings that was attributed to recent acquisitions, unusually warm weather and a slow economy.

The economy and volatile conditions within the energy industry also ended Allegheny's plan to split into two publicly traded businesses this year and forced the company to cut 2001 earnings forecasts in December. Yesterday, company officials said an initial public offering planned for the spring has been canceled because of unfavorable market conditions.

But despite a turbulent year, the Hagerstown-based energy company said its 2001 earnings jumped 32 percent, compared with 2000, thanks to the addition of 3,000 megawatts of electricity, the acquisition of an energy trading business and steady earnings from its utility delivery business.

"The past year was a good one for Allegheny Energy," Chairman and Chief Executive Alan J. Noia said in a prepared statement. "I am particularly pleased with our strong performance during a year when the nation, the economy and the energy industry as a whole faced unprecedented challenges ... "

Before extraordinary charges, Allegheny posted 2001 net income of $448.9 million, or $3.74 per share, compared with $313.7 million, or $2.84 per share the previous year. An after-tax charge of $31.1 million attributed to an accounting change shaved 26 cents off the total earnings per share.

Earnings per share were slightly better than Allegheny's revised earnings estimate in December of $3.60 to $3.70 a share, excluding one-time earnings. The company originally had expected earnings of $3.80 to $4.10 for the year.

Revenue for 2001 jumped 158.7 percent to $10.4 billion from $4 billion in the year 2000.

But for the three months that ended Dec. 31, Allegheny posted earnings of 52 cents per share, or $64.6 million. In the corresponding period in 2000, the company earned 72 cents per share, or $79.7 million.

Allegheny's stock closed up 65 cents at $32.91 yesterday on the New York Stock Exchange.

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