International operations enabled UtiliCorp United to post higherearnings during the first quarter despite sharply lower resultsfrom Aquila Energy’ midstream activities. UtiliCorp reportedearnings of $51.9 million, up from $43.3 million a year earlier.Diluted earnings per share for the quarter were $.57 in 1999compared to $.53 in 1998.

“Strong earnings from our businesses in the United Kingdom andNew Zealand turned a quarter that was seriously challenged byweather in the U.S. into a success,” said CEO Richard C. Green, Jr.”Building on our substantial success in the United Kingdom, todaywe are also announcing the start of a planned expansion into Europeby our Aquila Energy subsidiary. We remain confident that UtiliCorpwill again deliver 8% earnings growth in 1999,” he said.

The company’s regulated electric businesses segment postedearnings before interest and taxes of $76.5 million compared to$71.6 million in 1Q98. But Aquila Energy’s first quarter earningsdropped 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 tradingoperations related to warmer than normal temperatures, higherindependent power costs and a 97% decline in earnings from82%-owned Aquila Gas Pipeline. However, Aquila expects results toimprove later this year because of several recent midstreampurchases, including the 20 Bcf gas storage facility at the Katyhub in Texas, a coal blending and storage terminal in WestVirginia, a 500-MW combined cycle generation plant in Missouri andmarketing rights to Oasis Pipe Line’s short-term transportationcapacity.

Meanwhile, earnings from UtiliCorp’s New Zealand operationsincreased $13.1 million and its UK marketing business showed strongresults, rising $5.8 million to $4.2 million in the first quarter.”Energy is an international business serving global needs, and asignificant element of our strategy is to be a key player inmarkets outside the United States,” said Green. In 1999,international operations are expected to contribute 30% of thecompany’s earnings before interest and taxes (EBIT), up from 16% in1995. Aquila is actively seeking strategic European assets tosupport its strategy on the continent, Green added.

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