UtiliCorp Expects 15% Growth
After last year's phenomenal earnings growth rate of 26%,
UtiliCorp United's CEO thinks the energy services provider has
never been stronger, and said last week that the company's diverse
portfolio should guarantee earnings of at least 15% for the next
several years. Rick C. Green Jr. stressed, though, that diversity
did not necessarily mean adding more assets, just doing well with
the ones the company already holds.
CEO Green, speaking to analysts at a meeting in Kansas City, MO,
said the market was "finally starting to recognize" UtiliCorp's
strength, a recognition that he said was not recognized by
investors more than a year ago.
"Not quite a year ago, our stock traded at an all time low,"
Green said. "By the end of the year, it was trading at $31 a share,
and it continues to trade at $31 a share." Pointing to the
company's recent completion of a successful equity offering, Green
said there continues to be a "strong demand on the institutional
side" for UtiliCorp's diverse products and limited strategies. In
February, UtiliCorp announced that it saw a 56% increase in sales
in 2000 along with its strong earnings rise. The company set
records for earnings before interest and taxes, net income and
sales in 2000.
Green noted that the company's success rested not in its
portfolio, per se, but rather in its "limited number of
strategies," which he said it had "gotten very good" at fulfilling.
"As you invest in your businesses, you find there is a lot of
opportunity in the daily course of business to monetize your
assets. We've had an ongoing stream of profit over the years."
Three key strategies are pushing UtiliCorp's future: to become a
premier global energy merchant; to develop risk energy products;
and to become a leading service provider. With that small strategy
base, Green said that the company's risk energy market has grown
"phenomenally," and now considers itself a world class manager of
"One of the keys to grow profit has been our attitude toward
running the business," he said. "For three years we had 8% growth
and in 2000 we had 26% growth, with more customers and more market
share. That has given us the confidence that our bar going forward
is 15% and we are confident that we can do that into the future."
Stressing that its broadband strategy had been in place "for
several years," Green said that UtiliCorp wants to become more
unregulated as it moves forward, and energy services will be key to
this. "We want to become an unregulated company...by plan and by
choice," he said. "We've spent a lot more time growing our merchant
and international businesses. Broadband has the potential to grow
and would continue to cause the regulated part of the business to
become a smaller portion of the business."
Last year, on March 31, 2000, the company had total assets of
$7.5 billion and annual sales of $19.6 billion. It now serves about
4 million customers across the United States and in Canada, the
United Kingdom, New Zealand and Australia. For 1999 it was ranked
the second-largest wholesale marketer of electricity in the United
States and the third-largest marketer of natural gas.
Carolyn Davis, Houston