Driven in large part by an expected 37% increase in Aquila Energy earnings in the third quarter, UtiliCorp United said it expects to beat analysts’ expectations of 52 cents/share with earnings per share of $0.56-0.58 and net income of $66-69 million. That compared with net income last year during the same quarter of $0.80 per share or $74.9 million, which included a special $29 million gain ($0.30/share) from the initial public offering of Uecomm, Ltd. in Australia.

The company said it expects to exceed its previous earnings guidance of $2.54/share for the year, and be in the range of $2.90 to $2.95 per share, which is about 32% above its 2000 results. However, it probably will not meet analysts’ expectations of $2.59/share for the year because of trouble in its telecommunications business. As a result of that news the company’s stock prices tumbled sharply lower Wednesday. Aquila shares had lost more than 13% of their value by 3 p.m. EST.

“Our diversified portfolio of network assets did very well, and Aquila, our energy merchant and risk management business, not only continued its strong performance but exceeded our original forecast for the quarter,” said CEO Richard C. Green Jr. “We expect Aquila’s third-quarter earnings per share to be up about 37% compared to a year ago.”

President Robert K. Green said there has been strong interest in Aquila’s risk management solutions recently. “We may be in a tough commodity cycle, but combining our long track record as an energy merchant, our national scope and strong focus on client-originated business has again been a key competitive advantage.”

Aquila expects to report net income of $37 million or $0.37 per share, compared to $23 million or $0.27 per share in 3Q2000. Aquila CEO Keith G. Stamm said earnings are being driven by Aquila’s Capacity Services portfolio of generation assets and growth in client services’ structured products.

UtiliCorp and Aquila will announce final earnings next month.

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