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Avista Warns of Lower Second Quarter Earnings

Avista Warns of Lower Second Quarter Earnings

Avista Corp. has warned preliminary estimates indicate second quarter earnings per share will fall below securities analysts' current consensus second quarter estimate of $0.33 per share due to losses in April and May within Avista Energy, its national energy marketing and trading. First quarter earnings in 1998 were $0.27 per common share. The prospects for a disappointing second quarter follow on first quarter earnings of $0.34 per diluted share, well below the $0.56 per share in first quarter 1998.

Avista Energy results throughout the first half of 1999 have been affected by weak national energy prices, unfavorable weather issues in the Northwest and the lack of volatility within virtually all commodities, according to Chairman T. M. Matthews. However, Matthews said he expects positive results from Avista Energy in June and for the remainder of 1999, based on full integration of Vitol Gas & Electric, its strong management team, and key staff additions, which have substantially strengthened the Avista Energy team (See Daily GPI, May 26). He stressed the addition of intellectual capital is a significant step.

Despite this expected turnaround, Matthews said overall Avista Energy results for the year could be a negative 10 cents per share because of the February through May losses. "We believe the steps we have taken to improve and expand our national strategy are sound and, not withstanding the near term costs we are experiencing to implement it, our confidence in those actions will be born out throughout the remainder of the year and in the future," Matthews said.

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