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PG&E Net Income Falls; Profits from Operations Flat

PG&E Corp. reported Wednesday that its net income for the second quarter was down compared with the same period in 2004 -- 70 cents/share this year, compared with 88 cents/share the second quarter last year -- but its earnings from operations were essentially flat, hitting 69 cents/share this past quarter, compared with 70 cents/share in the second quarter of 2004.

The holding company for the Pacific Gas and Electric Co. utility increased its earnings guidance for this year and next by a nickel a share to ranges of $2.20-$2.30/share this year and $2.35-$2.45/share in 2006.

CEO Peter Darbee said PG&E sits in a "solid position" at mid-year with a "sound financial health and stable business climate" combining to provide what he called "an excellent platform" for the company to deliver value to both its millions of utility customers and to shareholders.

For the quarter, net income was $267 million, compared with $372 million for the same period in 2004, and overall operating revenues were down $251 million ($2.498 billion vs. $2.749 billion last year). PG&E's utility results reflect a depressed electricity market in the second quarter as power revenues were down $287 million from the second quarter of 2004, and the utility's cost of electricity dropped by nearly $200 million; in contrast natural gas revenues and costs were up on a quarter-over-quarter basis.

In the second quarter, natural gas revenues were $718 million, compared with $686 million for the same period in 2004; and costs were $347 million, compared to $278 million in the 2004 period. Electric revenues were $1.78 billion for the second quarter, compared to $2.06 billion in the same quarter a year earlier, while cost of electricity was $487 million, compared with $685 million in the second quarter of 2004.

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