(Updates with additional details and comment from conference call.)
DOW JONES NEWSWIRES
PG&E Corp.'s (PCG) third-quarter profit rose 4.6%, beating
analysts' estimates on additional revenue from new infrastructure
investments.
PG&E said its Pacific Gas & Electric Co. utility has
spent $3 billion on infrastructure so far this year, boosting the
amount of assets on which it's permitted to earn returns. The
utility's profits are more insulated from slumping power demand
because California regulation decouples returns from power
sales.
Pacific Gas & Electric has about 15 million customers in
central and northern California and has been working to stem unpaid
bills during the economic downturn in the state, with
home-foreclosure rates among the nation's highest. The company has
also been trimming costs, with utility president Christopher Johns
saying on a conference call that the company's workforce has been
cut by a little over 2%.
PG&E reported profit of $321 million, or 83 cents a share,
up from $307 million, or 83 cents, a year earlier. On a non-GAAP
basis, the company earned 93 cents a share compared with 83 cents.
Revenue fell 12% to $3.23 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 91 cents a share on $3.48 billion in sales.
Operating margin rose to 18.8% from 17.4%, while the utility's
electricity sales declined 8.7%, and its natural gas revenue
plunged 24%.
The company stuck by its financial guidance for the year, saying
it still expects earnings per share of $3.15-$3.25. Analysts
expect, on average, 2009 earnings of $3.16 a share. PG&E
reaffirmed its guidance for 2010 and 2011 as well, saying it
expects EPS of $3.35-$3.50 and $3.65-$3.85, respectively.
The company said Monday that it agreed to buy solar energy from
two California projects, one from FPL Group Inc.'s (FPL) NextEra
and the other from Spain's Abengoa SA (ABG.MC), as the company
looks for ways to boost renewable-energy development to meet
government mandates and prepare for federal constraints on
greenhouse-gas emissions.
Also on Monday, California Gov. Arnold Schwarzenegger said
PG&E had agreed to increase the percentage of its customers
that can sell power back to the utility from rooftop solar systems
to 3.5% from 2.5%. Growing customer purchases of rooftop-solar
systems threatened to run up against the 2.5% cap, which would have
stymied demand and solar development in the state.
Shares of PG&E were recently down 22 cents at $41.33 apiece
on the New York Stock Exchange.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com
(Mark Long in New York contributed to this article.)
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