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Charges Annihilate PacifiCorp Earnings

April 5, 1999
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Charges Annihilate PacifiCorp Earnings

A rate refund, refocusing and early retirement programs, plus both failed and successful merger costs wiped out PacifiCorp's 1998 earnings of $300 million, leaving the company with a $55 million loss for the year. In comparison 1997 earnings after special items were $641 million; they were $350 million before special items. The company's refocusing in 1998 and 1999 includes shutdown of its energy marketing business, the sale of TPC Corp., and of Energy Works, a joint venture with Bechtel, and the closing of its Turkish enterprises.

"We have moved quickly to execute our new strategy, and I am pleased with the progress we have made so far," CEO Keith McKennon told analysts and investors during a conference call last week. "We still have a long way to go toward fully implementing our strategy and improving our financial performance, but the early returns are good."

"While 1998 was a very disappointing year financially for PacifiCorp, I am pleased that our recurring earnings for the fourth quarter - the first reporting period following the implementation of our new refocused western strategy - were in line with expectations," McKennon said. Fourth quarter earnings were $67 million, excluding the effects of a rate case in Utah, costs associated with the merger with Scottish Power, a write-down and special charges. Total fourth quarter earnings were $21 million.

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