With a strong boost from its wholesale merchant businesses, South Dakota-based Black Hills Corp. Tuesday reported an overall earnings increase for both the second quarter and the first six months of this year, with increases in all of its principal business units -- both utility and merchant operations. Net income for the second quarter was $14.9 million, or 45 cents/share, compared to $11.4 million, or 35 cents/share, for the same period last year.
For the first half of this year, profits were $30.6 million, or 93 cents/share, compared to $21.1 million, or 65 cents/share, for the first six months in 2004. Part of the results were due to a 17% boost in production from its oil/natural gas operations and a 17% boost in net income from merchant power generation, company officials said.
Black Hills sold its telecommunications business for about $103 million on June 30, resulting in a loss of $1 million for the second quarter. On a continuing operations basis for all of the other businesses, second quarter results were $16 million, or 48 cents/share, in earnings, compared to $9.7 million, or 30 cents/share, for the same period in 2004, and $32.8 million, or 99 cents/share, for the first six months, compared to $21.5, or 66 cents/share, for the first half of last year.
By business unit, the increases across the board in the second quarter were: an added $3.5 million, or 11 cents/share, from oil/gas production; $1.6 million, or 5 cents/share, from electric utility operations (Black Hills Power); $1.1 million, or 3 cents/share, from energy marketing/transportation; and $900,000, or 3 cents/share, from power generation.
Black Hills CEO David Emery said the results added up to "a solid performance in several wholesale business segments during the second quarter of 2005." And Emery added that retail utility operations "showed considerable improvement in the second quarter."
"The integration of Cheyenne Light, Fuel & Power into our retail services group [since Jan. 1, 2005] continued in the second quarter, and its performance was consistent with expectations," Emery said. "We look to increase long-term returns through a rate increase that would become effective in January 2006 upon approval by the Wyoming Public Service Commission."
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