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Overseas Strength Boosts UtiliCorp's Results

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 capacity.

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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