Utility company PNM Resources Inc. (PNM) Friday said it posted a profit in the first quarter, largely on a gain from the sale of its natural-gas business, and maintained its earnings outlook for 2009.

Shares of the Albuquerque, N.M., company rose nearly 10% as earnings excluding one-time gains and losses beat market expectations.

PNM said it is seeing improvement at its nonregulated Texas retail operation, First Choice Power, which last year struggled with fallout from turmoil in the Texas power market and bad debts. PNM said its key operating territories in New Mexico and Texas fared better than the rest of the U.S. during the economic downturn in the first quarter, with fewer job losses.

"While we are seeing a reduction in load throughout our operations, it appears to be less than what is being observed in other parts of the country," PNM Resources Chairman and Chief Executive Jeff Sterba said in a press release.

PNM reported first-quarter earnings of $95.4 million, or $1.04 a share, compared with a loss of $48.6 million, or 63 cents a share, a year earlier.

Earnings per share excluding gains and losses were 10 cents a share, up from 5 cents a year ago and ahead of the average forecast from analysts polled by Thomson Reuters for a loss of 6 cents a share.

"While we question the sustainability of significantly higher margins at First Choice, we note that 1Q09 results appear to signal an improvement in the underlying businesses," analysts at JPMorgan wrote in a note to clients.

PNM Resources stuck by its guidance for 2009 earnings per share of 25 cents to 40 cents, assuming no rate relief, according to a presentation posted on the company's Web site. Analysts had forecast, on average, 2009 EPS of 47 cents.

PNM's utility operations and First Choice Power saw lower retail electric sales volumes as mild weather and the recession crimped demand. PNM Electric, the company's New Mexico utility, saw total retail power load - adjusted for weather - drop 3.7%, mainly on a drop of 6.1% in industrial-sales volumes. Bad-debt expenses grew at First Choice Power, though a drop in natural-gas and power prices improved margins at that retail business.

Shares of PNM, which had fallen nearly 40% from last May, were recently up 81 cents, or 9.5%, at $9.33 apiece.

-By Mark Long, Dow Jones Newswires; 201-938-4427; mark.long@dowjones.com

(Cassandra Sweet in San Francisco and Mark Peters in New York contributed to this article)