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PNM 3Q Profits Increase 39%; PowerGen Up, Utilities Down

Despite continued gas and electric utility earnings decreases, PNM Resources Thursday reported unaudited third-quarter consolidated earnings that jumped up 39.1% compared to the same period in 2005, riding improved electric generation plant results. Net ongoing quarterly earnings were $44.4 million, or 63 cents/diluted share, compared to $31.9 million, or 46 cents/diluted share in the third quarter last year.

For the nine months ended Sept. 30, net ongoing earnings were $88.7 million, or $1.27/diluted share, compared with $75 million, or $1.16/diluted share, for the first nine months of 2005. Total revenues for the three- and nine-month periods this year were $650 million and $1.8 billion, respectively, compared to $597 million and $1.4 billion, respectively, for the three- and nine-month periods last year.

"The current earnings of PNM gas and electric utilities are declining despite solid customer growth, underscoring the need for rate adjustments," said PNM CEO Jeff Sterba, who noted that last May the Albuquerque-based utility filed for a gas rate increase of $20.7 million and plans to file an electric rate case late this year or early next year to be effective in January 2008.

Sterba emphasized "strong performance" at the PNM San Juan and Four Corners power plants, along with "improved performance" at the Palo Verde nuclear generating plant near Phoenix, AZ, in which PNM holds an interest. "Also, the acquisition of the Twin Oaks Power facility in Texas continues to be a strong contributor to earnings," Sterba said.

To date, the Texas-New Mexico utility acquired last year has reported revenues, earnings and margins that are down. Electric operations for that utility were "negatively impacted by rate reductions and reduced usage resulting from cooler weather," PNM said in its written announcement on third-quarter results.

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