Dominion earnings beat consensus Wall Street estimates by about 2 cents/share coming in at $180 million (72 cents/share), compared to $139 million (59 cents/share) for the same period in 2000. The improved performance was mainly attributed to higher gas and oil prices and the addition of the Millstone nuclear power station. Other highlights included the addition of more than 2,600 MW of new generation during the quarter, 47,000 new energy delivery customers, a 130 Bcf increase in proven gas and oil reserves to 2.95 Tcfe–resulting in a 266% reserve replacement ratio, and the divestiture of Saxon Mortgage.

“During the second quarter, Dominion made significant progress toward becoming the leading energy company in the Midwest to Northeast portion of the United States,” said CEO Thos. Capps. “Performance remains strong at all of our core businesses, and we expect to meet or exceed the First Call 2001 consensus analyst estimate of $4.15/share. This will represent about 25% year-over-year growth, and will be the third consecutive year Dominion has grown earnings at the top end or above its long-term growth target. In addition, we are increasing our 2002 operating earnings target from about $4.50/share to a range of $4.85 to $4.90/share, based on expected continued solid growth in our core energy businesses and the elimination of goodwill amortization beginning Jan. 1, 2002.

Second quarter operating earnings exclude a one-time after-tax charge of $24 million associated with the divestiture of Saxon Capital, the company’s residential mortgage company. The sale was required by regulators as part of the company’s January 2000 merger with Consolidated Natural Gas.

Operating earnings from Dominion Energy, the company’s electric generation and gas pipeline business segment, rose 53% to $148 million. The increase was attributed to the addition of the Millstone nuclear power plant, lower purchased power expenses and lower depreciation expenses partially offset by milder weather. Dominion Delivery, the company’s electric and gas distribution and customer service segment, showed a 15% drop in earnings because of milder weather and a higher reserve for uncollectible gas receivables, resulting from higher commodity sales and prices in the first quarter of 2001, partially offset by customer growth.

Dominion Exploration & Production posted a 36% earnings increase to $84 million because of higher gas and oil prices, partially offset by higher operating expenses. And Dominion Capital, the company’s financial services subsidiary, reported a loss of $11 million compared to income of $6 million last year.

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