Underscoring the growing industry trend of "back-to-basics" utility business focus, Spokane, WA-based Avista Corp. Wednesday reported second quarter results that nearly doubled over the same period last year with almost all of the profits coming from its utility operations. Avista earned $18.6 million, or 38 cents/diluted share, in the second quarter, compared with $10.1 million, or 21 cents/diluted share, for the same period in 2004.
Avista Utilities contributed $18.4 million, or 38 cents/diluted share, to the net income of the holding company, an increase from $9.1 million, or 19 cents/diluted share, in the second quarter last year. Avista said the results reflected the benefits of two general rate increases implemented in the second half of 2004 in the states of Washington and Idaho, lower resource costs in Washington because of a regulatory cost recovery mechanism, and a gain on the sale of natural gas utility operations in South Lake Tahoe, CA, to Las Vegas-based Southwest Gas Corp.
For the six months ended June 30, Avista reported net income of $28.8 million, or 59 cents/diluted share, compared with $22.4 million, or 46 cents/diluted share, for the same period in 2004. The utilities contributed $37.4 million, or 76 cents/diluted share, for the first six months this year, compared to $19.9 million, or 41 cents/diluted share, for the same period last year.
Avista CEO Gary Ely said the utilities continue to "produce strong results," aided by the rate cases from last year and from what he called "ongoing productivity initiatives" that are helping boost net income and operating cash flow. "We are pleased with the positive results from Avista Advantage, and we expect the Energy Marketing and Resource Management segment to have positive earnings for the second half of this year."
After showing losses for the first half of 2004, the merchant operations of Avista Advantage showed profits for both the second quarter and the six-month period in 2005 ($900,000, or 2 cents/diluted share and $400,000, or 1-cent/diluted share, respectively), the company reported.
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