Pinnacle West Reports Third Quarter Earnings


PHOENIX- Pinnacle West Capital Corporation (NYSE: PNW) today reported income before accounting change for the quarter ended September 30, 2001, of $162.5 million or $1.91 per diluted share of common stock. The result compares with income of $116.0 million or $1.37 per share for the same period in 2000.

The improvement in Pinnacle West earnings for the quarter came primarily from its power marketing and trading performance. Although wholesale power prices declined by 80 percent in the West, the Company was able to capture higher than anticipated profits in the third quarter through structured trading activities.

"Our customers and our shareholders benefited from our power marketing and trading function managing the very volatile western wholesale market," said Chairman Bill Post. "Our performance for this year has clearly exceeded historical levels, but looking ahead to 2002, changes in the wholesale market, economic conditions and weather effects will make a repeat performance a real challenge."

"The fundamentals that have driven our past results do remain strong and provide us with a solid platform for the future," he added.

Earnings before accounting change at Arizona Public Service (APS) were down 13 percent for the quarter at $108 million, compared with $124 million for the same prior-year period. The lower earnings at APS were due partially to the 2001 summer reliability program.

"We stepped up to the challenge of exceptionally high customer demand over the last two years," said Post, "but reliability came at a cost, including temporary generating units and purchased power for our customers this summer. Although our customers participated in an aggressive conservation effort, the demand for energy this summer was still the highest in our history."

In addition to the cost of the summer reliability program, APS’ earnings were negatively affected by a retail electricity price decrease.

On July 1, 2001, APS lowered prices by 1.5 percent, the seventh decrease in eight years. These decreases are part of APS’ commitment to reduce residential and small commercial customers’ rates a total of 16 percent from 1994 to 2004.

APS’ retail service territory continued to experience strong customer growth of 3.5 percent, about three times the national average. Retail energy sales increased from the same quarter last year, climbing 2.0 percent to 7.3 billion kilowatt-hours (kWh). Third quarter wholesale power sales were 5.7 billion kWh, down about 44 percent from the comparable period in 2000.

SunCor Development Co., the Company’s real estate subsidiary, and El Dorado Investment Co., its investment subsidiary, reported combined income of $2.2 million for the quarter, compared with a combined loss of $6.6 million in the same period last year. El Dorado’s third quarter results last year reflected mark-to-market writedowns which are not expected to recur.

Consolidated net income for the third quarter included a $12 million after-tax loss due to the cumulative effect of adopting a new accounting rule.

Pinnacle West is a Phoenix-based company with consolidated assets of approximately $8 billion. Through its subsidiaries, the company generates, sells and delivers electricity and sells electricity and energy-related products and services to retail and wholesale customers in the western United States. It also develops residential, commercial, and industrial real estate projects.


Alan Bunnell, (602) 250-3376

Rebecca Hickman, (602) 250-5668
Lisa Malagon, (602) 250-5671

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.

Email Alerts


Enter the code shown above.