Pepco Profits Shoot Up as Temperatures Slide
Tai, Jennifer, The Washington Times (Washington, DC)
Plunging temperatures meant higher quarterly and annual profits last year, Potomac Electric Power Co. said yesterday.
The District-based utility reported earnings for the fourth quarter and fiscal 1996. Net income for the quarter ended Dec. 31 jumped 22 percent to $11.3 million (6 cents per share), compared with $9.3 million (4 cents) in the same quarter of 1995.
Revenues for the quarter rose 3 percent to $413.7 million. Pepco reported revenues of $402.3 million for the last quarter of 1995.
For all of 1996, Pepco said its net income more than doubled to $237 million ($1.86 a share) from $94.4 million (65 cents) in 1995. Annual revenues were up 7 percent to $2.01 billion from $1.88 billion.
The 1995 results include a net charge of $122.2 million ($1.04 a share) related to the termination of an investment in the aircraft-leasing business.
Pepco's 1996 results beat analysts' estimates of $1.80 per share.
"Their results were largely due to the colder-than-ever weather in early winter of 1996," said Ronald S. Tanner, an analyst and the vice president of research with Legg Mason Wood Walker Inc., a Baltimore-based brokerage. Mr. Tanner said the 3.8 percent customer rate increase effective in July 1995 also contributed to Pepco's "very good" results.
"But they will have to give it back next year when the weather comes back to normal, and their earnings would be lower than this year," the analyst predicted. …