Consolidated Edison (Con Edison) reported a 58% drop in net income in the fourth quarter of 2003 to $50 million (21 cents/share) mainly because of one-time charges related to its unregulated telecommunications and generation businesses. It reported an 18% drop in net income for the year, but the utility company said earnings from continuing operations rose 22% to $146 million (65 cents/share) in the fourth quarter and slipped only 7% to $624 million ($2.83/share) for the year.

“Con Edison’s utility operations performed very well in 2003,” said CEO Eugene R. McGrath. For the year 2003, the amounts of electricity, firm gas and steam delivered by Con Edison after adjusting for variations in weather and billing days in the period and an August power outage, increased 0.6%, 3.6% and 0.9%, respectively, as compared with the 2002 period.

However, in light of difficult market conditions, the company recognized impairment charges of $159 million ($94 million after-tax) for its unregulated telecommunications and generation businesses in the fourth quarter. Con Edison said it is evaluating strategic alternatives for its telecommunications business. During the quarter, Con Edison also recognized an $8 million ($5 million after-tax) charge for the settlement of a proceeding regarding outages at a nuclear generating unit the company sold in 2001.

The company also declared a quarterly dividend of 56.5 cents a share on its common stock, an annualized increase of two cents. “The dividend increase reflects our continued confidence in our business and the underlying economic strength of our service area,” said CFO Joan S. Freilich. “While our earnings have been negatively impacted by the recent economic slowdown and by increased costs at Con Edison of New York that are not yet reflected in rates, we remain strong financially, with a solid balance sheet, good liquidity and above average debt ratings.”

Con Edison expects its earnings for 2004 to be in the range of $2.60 to $2.80 a share, which would be on the low end of current analysts’ expectations. The company said its forecast reflects increased pension and other post-retirement benefit costs, insurance premiums and depreciation expense, partially offset by sales growth.

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