PHOENIX, ARIZ. - Pinnacle West Capital Corporation (NYSE:PNW) today reported net income for the quarter ended March 31, 1998 of $31 million or $0.36 per share of common stock, compared with $25 million or $0.29 per share for the same period in 1997. (In both cases diluted.)
Chairman Richard Snell said that results included the effects of four percent customer growth at Arizona Public Service (approximately three times the national average).
Partially offsetting the benefits of customer growth was the effect of a 1.2 percent price decrease for electricity customers, which became effective July 1, 1997. APS has filed for an additional 1.1 percent price decrease, which would be effective July 1, 1998 if approved, and which would represent its fourth price decrease in five years.
"Our region's economy continues to provide us with opportunities to deliver results for shareholders and benefits to customers," Snell said.
Also contributing to the earnings improvement in the quarter-to-quarter comparison were lower financing costs. Earnings per share benefited from an $80 million stock buyback program in 1997.
For the first quarter of 1998, utility operations and maintenance expenses were up as a result of growth and competition, increased outages at coal plants and other miscellaneous factors, partially offset by savings resulting from a 1996 voluntary severance program and lower nuclear operating costs.
Electric revenues and related fuel expenses were affected by power marketing activity, which can vary from period to period without corresponding effects on earnings due to low margins on such activities.
For the quarter ended March 31, 1998, APS earned $29 million, compared with $25 million for the prior-year period. SunCor, the Company's real estate subsidiary, and El Dorado, its investment subsidiary, reported combined earnings of $6.4 million, compared with $4.4 million for the corresponding 1997 period.
Also today the Pinnacle West board of directors declared a dividend of 30 cents per share of common stock payable June 1, 1998 to shareholders of record on May 1, 1998.
Pinnacle West is a Phoenix-based holding company with consolidated assets of approximately $7 billion. Its major subsidiary is APS, the state's largest electric utility.
Pinnacle West Capital Corporation Consolidated Income Statements
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended
March 31, |
Twelve Months Ended
March 31, |
| |
1998 |
1997 |
1998 |
1997 |
|
|
|
| Operating revenues |
| Electric |
$ 380,423 |
$ 379,021 |
$ 1,879,955 |
$ 1,752,032 |
| Real estate |
34,161 |
19,543 |
131,091 |
103,037 |
|
|
| Total |
414,584 |
398,564 |
2,011,046 |
1,855,069 |
|
|
| Fuel Expenses |
(73,917) |
(85,469) |
(425,075) |
(354,720) |
| Utility operations and maintenance |
(96,416) |
(88,016) |
(407,834) |
(430,987) |
| Real estate operations |
(30,236) |
(19,762) |
(122,102) |
(98,300) |
| Other operating expenses |
(123,178) |
(122,846) |
(490,163) |
(451,294) |
|
|
| Operating Income |
90,837 |
82,471 |
565,872 |
519,768 |
|
|
| Interest expense |
(42,417) |
(43,952) |
(177,808) |
(188,419) |
| Other deductions - net |
5,632 |
4,431 |
9,175 |
(6,793) |
|
|
| Income From Continuing Operations Before Income Taxes |
54,052 |
42,950 |
397,239 |
324,556 |
|
|
| Income tax expense |
22,966 |
17,568 |
155,679 |
122,974 |
|
|
| Income From Continuing Operations |
31,086 |
25,382 |
241,560 |
201,582 |
| Loss on discontinued operations, net of tax of $6,461 |
-- |
-- |
-- |
(9,539) |
| Extraordinary charge for early retirement of debt, net of tax of $11,341 |
-- |
-- |
-- |
(16,743) |
|
|
| Net Income |
$ 31,086 |
$ 25,382 |
$ 241,560 |
$ 175,300 |
|
|
|
| AVERAGE COMMON SHARES OUTSTANDING |
84,785 |
87,419 |
84,854 |
87,434 |
|
| EARNINGS (LOSS) PER AVERAGE COMMON SHARE |
|
|
|
|
| Continuing operations |
$ 0.37 |
$ 0.29 |
$ 2.85 |
$ 2.30 |
| Discontinued operations |
-- |
-- |
-- |
(0.11) |
| Extraordinary charge |
-- |
-- |
-- |
(0.19) |
|
|
| Total |
$ 0.37 |
$ 0.29 |
$ 2.85 |
$ 2.00 |
|
|
| Fully diluted |
$ 0.36 |
$ 0.29 |
$ 2.83 |
$ 1.99 |
|
|
|
|
Contacts
This press release contains forward-looking statements that involve risks and uncertainties, which include, but are not limited to, the ongoing restructuring of the electric industry; the outcome of the regulatory proceedings relating to the restructuring; regional economic and market conditions, which could affect customer growth and the cost of power supplies; the cost of debt and equity capital; weather variations affecting customer usage; and the strength of the real estate market. These factors and the other matters discussed above may cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by the Company.