Overseas Strength Boosts UtiliCorp's Results
International operations enabled UtiliCorp United to post higher
earnings during the first quarter despite sharply lower results
from Aquila Energy' midstream activities. UtiliCorp reported
earnings of $51.9 million, up from $43.3 million a year earlier.
Diluted earnings per share for the quarter were $.57 in 1999
compared to $.53 in 1998.
"Strong earnings from our businesses in the United Kingdom and
New Zealand turned a quarter that was seriously challenged by
weather in the U.S. into a success," said CEO Richard C. Green, Jr.
"Building on our substantial success in the United Kingdom, today
we are also announcing the start of a planned expansion into Europe
by our Aquila Energy subsidiary. We remain confident that UtiliCorp
will again deliver 8% earnings growth in 1999," he said.
The company's regulated electric businesses segment posted
earnings before interest and taxes of $76.5 million compared to
$71.6 million in 1Q98. But Aquila Energy's first quarter earnings
dropped 61% to $8.5 million. Significant growth in market share,
including gas volumes up 21% to 10.8 Bcf/d and power volumes up 86%
to 44 million MWh, failed to offset reduced margins in gas trading
operations related to warmer than normal temperatures, higher
independent power costs and a 97% decline in earnings from
82%-owned Aquila Gas Pipeline. However, Aquila expects results to
improve later this year because of several recent midstream
purchases, including the 20 Bcf gas storage facility at the Katy
hub in Texas, a coal blending and storage terminal in West
Virginia, a 500-MW combined cycle generation plant in Missouri and
marketing rights to Oasis Pipe Line's short-term transportation
Meanwhile, earnings from UtiliCorp's New Zealand operations
increased $13.1 million and its UK marketing business showed strong
results, rising $5.8 million to $4.2 million in the first quarter.
"Energy is an international business serving global needs, and a
significant element of our strategy is to be a key player in
markets outside the United States," said Green. In 1999,
international operations are expected to contribute 30% of the
company's earnings before interest and taxes (EBIT), up from 16% in
1995. Aquila is actively seeking strategic European assets to
support its strategy on the continent, Green added.
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