GMP Announces Third Quarter Earnings
November 01 2005 - 9:22AM
Business Wire
Green Mountain Power Corporation (NYSE: GMP) today announced
consolidated earnings of $0.48 per share of common stock, diluted,
for the third quarter of 2005 compared with consolidated earnings
of $0.65 per share of common stock, diluted, for the same period in
2004. Year to date earnings for 2005 are $1.50 per share, diluted,
compared with earnings of $1.70 per share, diluted for the first
nine months of 2004. Earnings declined in the third quarter of 2005
primarily as a result of higher power supply, other operating and
transmission expenses partially offset by an increase in retail
revenues. "The earnings decline in 2005 was caused in large part by
significantly higher wholesale energy prices," said Christopher L.
Dutton, President and Chief Executive Officer. "We expect earnings
to bounce back in the fourth quarter as the Company has more power
supply than anticipated demand, but not enough to counter the
weakness we experienced during the third quarter. As a result, we
are revising our forecast of 2005 earnings to be within a range of
$1.90 and $2.10 per share as compared with previous guidance of
$2.08 to $2.19 per share." The Company has long-term, essentially
fixed-price, power supply contracts that cover over 90 percent of
customer demand under normal weather conditions. Nonetheless we
were exposed to higher energy prices in the third quarter of 2005,
including lost margins on incremental sales, increased costs of
energy lost over the transmission system (line losses) and higher
allocated costs from ISO New England for congestion and other
ancillary energy services. Hurricanes Katrina and Rita and a very
hot summer sent New England wholesale electricity prices sharply
higher in the third quarter. "Cash flow has been strong in 2005,
and we expect to increase our annual dividend by 12 cents per share
in the first quarter of 2006, consistent with our dividend growth
over the last few years, so long as financial and operating results
permit," said Mr. Dutton. "Even after the anticipated 2006 dividend
increase, the Company's payout ratio will be below most other
comparable utilities, and we expect to continue our dividend growth
policy until we reach the middle of a payout range of between 50
and 70 percent of earnings." The Vermont Public Service Board
issued an order in December 2003 allowing the Company to carry
unused deferred revenue totaling approximately $3.0 million to 2004
and to recognize this revenue to achieve its allowed rate of return
during 2004. During the third quarter of 2004, the Company's
earnings benefited by $0.05 per share as a result of recognizing
deferred revenues, compared with no recognition of deferred revenue
during the same period of 2005. A rate increase of 1.9 percent
effective in January 2005 resulted in the replacement of deferred
revenues with cash revenues and has contributed to strong cash
flows in 2005. Retail operating revenues for the third quarter of
2005 increased by $6.4 million compared with the same period in
2004, reflecting the effects of warmer summer weather, increased
sales of utility services to other municipalities and utilities,
the 1.9 percent rate increase and an increase in the number of
customers. Total retail megawatt hour sales of electricity
increased by 6.6 percent in the third quarter of 2005, compared
with the same period in 2004. Sales to residential and small
commercial and industrial customers increased by 13.4 percent and
8.2 percent, respectively, compared with the third quarter in 2004.
By contrast, sales to large commercial and industrial customers
decreased by 0.2 percent in the third quarter of 2005 compared with
the same quarter last year. Increased revenues from the sale of
utility services to other utilities and large industrial customers
in the third quarter of 2005 also contributed approximately $2.1
million to retail revenue growth, when compared to the same period
last year. Other operating expenses increased by $1.9 million in
the third quarter of 2005, reflecting an increase of $1.7 million
in utility services expense. These sales of services are intended
to allow the Company to recover some of its administrative and
general and staffing costs from other parties and ultimately reduce
costs to customers. Wholesale revenues in the third quarter of 2005
also increased by $2.3 million compared with the third quarter of
2004, reflecting higher energy prices. Power supply expenses
increased $6.3 million in the third quarter of 2005 compared with
the same quarter of 2004 due to increased costs of market purchases
to serve marginal load, and increased costs of transmission line
losses and congestion costs allocated within the New England power
pool by ISO New England. Congestion charges represent the cost of
delivering energy to customers and reflect energy prices, customer
demands, and the availability of transmission and generation
resources. The Company paid an average market price of
approximately $103 per megawatt hour for system purchases during
hours when customer demand exceeded supply during the third quarter
of 2005, compared to $41 per megawatt hour in the same period last
year, inclusive of the effects of congestion and line losses.
Transmission expenses increased by $600,000 in the third quarter of
2005 compared with the same period last year, primarily as a result
of increased energy purchases. The Company's future growth will
benefit from expanded transmission investment by VELCO, principally
for the construction of high voltage transmission lines in Vermont.
The Northwest Reliability Project is the most significant component
of that expanded investment. The Vermont Public Service Board has
issued a certificate of public good for the project and VELCO has
begun construction of this project. In other developments, Green
Mountain Power will be recognized by the Edison Electric Institute
next week as the top-performing small-cap company in its Index of
Shareholder-Owned Electric Utilities for the past five years. The
index values total return over a five-year period. -0- *T Green
Mountain Power Corporation in thousands except per share amounts
Quarterly Earnings Summary Three Months Ended Nine months ended
September 30 September 30 2005 2004 2005 2004 -------- -------
-------- -------- Retail revenues $ 57,584 $51,224 $162,874
$154,838 Wholesale revenues 6,740 4,443 14,586 19,220 --------
------- -------- -------- Total operating revenues $ 64,324 $55,667
$177,460 $174,058 -------- ------- -------- -------- Net income $
2,542 $ 3,390 $ 7,902 $ 8,906 Net income applicable to common stock
2,542 3,390 7,902 8,906 Net income-continuing operations 2,524
3,392 7,900 8,915 Net income(loss)-discontinued operations 18 (2) 2
(9) Basic earnings per common share $ 0.49 $ 0.67 $ 1.52 $ 1.76
Fully diluted earnings per common share $ 0.48 $ 0.65 $ 1.50 $ 1.70
Dividends declared per share $ 0.25 $ 0.22 $ 0.75 $ 0.66 Weighted
average shares of common stock outstanding-Basic 5,208 5,089 5,185
5,068 Weighted average shares of common stock outstanding- Diluted
5,301 5,251 5,284 5,238 *T There are statements in this information
release that contain projections or estimates and that are
considered to be "forward-looking" as defined by the Securities and
Exchange Commission (the "SEC"). In these statements, you may find
words such as believes, expects, plans, or similar words. These
statements are not guarantees of our future performance. There are
risks, uncertainties and other factors that could cause actual
results to be different from those projected. For further
information, please contact Dorothy Schnure, Manager of Corporate
Communications, at 802-655-8418 or Robert Griffin, Vice President,
Chief Financial Officer and Treasurer, at 802-655-8452.
Green MT Power (NYSE:GMP)
Historical Stock Chart
From Jul 2024 to Aug 2024
Green MT Power (NYSE:GMP)
Historical Stock Chart
From Aug 2023 to Aug 2024