FirstEnergy Q2 profit down
FirstEnergy Corp. reported second-quarter 2011 basic earnings of 65 cents per share of common stock on a non-GAAP basis, compared to basic and diluted non-GAAP earnings of 82 cents per share in the second quarter of 2010, excluding the impact of special items.
FirstEnergy posted second-quarter 2011 basic and diluted earnings, on a GAAP basis, of 43 cents per share of common stock on net income of $171 million and revenue of $4.1 billion. The company’s second quarter 2010 basic and diluted GAAP earnings were 87 cents per share on net income of $256 million, with revenue of $3.1 billion.
“These results are in line with our expectations, and today we are narrowing our 2011 non-GAAP earnings guidance to the upper end of the previous range – to $3.30 to $3.50 per share, from $3.20 to $3.50 per share,” FirstEnergy President and CEO Anthony Alexander said. “We have already made significant progress in realizing benefits from the merger with Allegheny Energy, and we remain confident that we will achieve our 2011 merger targets.”
The company’s second quarter 2011 non-GAAP results benefited from the net accretion from the Allegheny merger, including the impact of shares issued in the merger. Results were negatively affected by higher maintenance costs for the generation fleet, lower commodity margin from FirstEnergy Solutions resulting from unplanned generating unit outages, higher financing costs, and the absence of favorable tax settlements that were achieved last year.
Distribution deliveries, excluding Allegheny Energy deliveries, decreased 1% in the quarter. Usage by industrial customers decreased less than 1%, as higher usage in the steel sector was offset by decreased demand in the automotive and refinery industries. Residential sales decreased slightly, and commercial deliveries decreased 2%, FirstEnergy said.
In addition, FirstEnergy said commodity margin for FirstEnergy Solutions decreased compared to the second quarter of 2010, as higher competitive generation sales were offset by increases in transmission expense, higher purchased power costs, and lower wholesale sales.
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