True to its word that it would beat forecasts, first quarter earnings at Dominion were up 27% compared with a year earlier, as the Richmond, VA-based profited from the colder temperatures and greater demand from its utility. Wall Street analysts had predicted earnings of $1.24 per share, which the company predicted it would surpass.

Consolidated operating earnings were $471 million ($1.52 a share), compared with $322 million ($1.20) for 1Q02. Meanwhile, reported earnings before adjustments were $508 million ($1.64), a 37% increase. Dominion uses operating earnings as the measurement for external communications as well as measuring performance against budget, to report to the Dominion board of directors and for the company’s profit sharing plan.

“Dominion’s first quarter financial performance was spectacular,” said CEO Thomas E. Capps. “Dominion produced record first quarter earnings and is in a solid position to achieve full-year operating earnings per share of $4.60 to $4.80 in 2003 and 5-7% growth going forward.”

Capps noted that Dominion’s operating cash flow more than doubled to nearly $900 million compared with about $400 million in the first quarter of last year, and is “on track to produce more than $3 billion in operating cash flow this year, compared to $2.4 billion in 2002.”

The CEO said that all of the company’s core operating units performed well. “However, the biggest drivers of first quarter financial performance were colder weather, which drove significant increases in demand for our gas and electric products and services, and strong natural gas prices, which helped not only our E&P business, but also the Dominion Energy Clearinghouse. Earnings were strong despite a 4-cent per share negative mark-to-market impact related to the corporate hedge, which effectively will reverse over the course of the year in combination with physical gas sales.”

Management noted that its 2002 segment results were restated to reflect the transfer of the electric transmission operations from Dominion Delivery to Dominion Energy.

Dominion Energy’s earnings gained from customer growth and cooler weather in its electric franchise area, the performance of the Dominion Energy Clearinghouse and Millstone, and the impact related to corporate hedges of natural gas production, partially offset by a change in the allocation of electric franchise base revenues and share dilution.

Dominion Delivery also saw its earnings rise on customer growth and cooler weather. Meanwhile, its Exploration & Production (E&P) unit contributed 34 cents to first quarter earnings, up from 33 cents a year earlier mostly because of higher commodity prices.

Only its corporate unit, Dominion Capital, went down, reporting a loss of 22 cents in the quarter, compared with a loss of 20 cents a year earlier, coming off changes in its share dilution and after-tax items, which included severance costs for workforce reductions announced in January.

©Copyright 2003 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.