Avista 4Q Earnings Better Than Expected
Avista Corp., rocked by early cold weather and increased loads that reduced profit within its utilities division, now expects to report better-than-expected earnings for the fourth quarter, driven by its non-regulated energy trading arm, Avista Energy.
The Spokane, WA-based company's consolidated fourth quarter diluted earnings will exceed $.50 per share, based on results form the first two months of the quarter. The earnings would be well above the consensus figure of $.09, with earnings ranging between $.05 and $.17, according to seven analysts surveyed by First Call/Thomson Financial.
The improved performance by the energy arm offset predicted losses within Avista Utilities, which "continues to be affected by cold weather that has increased loads." The increased loads have led to higher purchased power costs that are not currently being recovered from customers or included in power cost deferrals.
Ironically, Avista's second quarter earnings, reported in June, were driven down by Avista Energy because of what the company called errors in its wholesale trading decisions made a few months earlier (see Daily GPI, June 22). However, company officials predicted then that the energy arm would recover and lead the way toward better economic health for the entire company by the end of this year.
Despite its comeback, there has been fallout within the company, with CEO Tom Matthews resigning in early November. Also last month, a federal investigation was launched into the trading practices of the company. Federal investigators have begun looking into possible energy futures trading rule violations that may have occurred two years ago at a Houston subsidiary (see Daily GPI, Nov. 16).
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