DTE Energy Co. reported a 39% increase in fourth quarter earnings per share, including special items, but a 33% drop in earnings per share for the year, including $1.13/share special charge related to its merger with MCN Energy. Operating earnings for the year before special charges were $536 million, or $3.48 per diluted share, compared to $484 million, or $3.39 per diluted share.

CEO Anthony F. Earley Jr. said the weak economy and mild weather in the fourth quarter hurt both electricity and gas sales, but increased earnings growth for DTE’s non-regulated subsidiaries, coupled with targeted cost-reduction programs throughout the company, helped the company achieve attractive financial results. “Our non-regulated energy businesses had an impressive showing in 2001, contributing $162 million in net income, which exceeded our $130 million target for the year,” Earley said. “We expect these businesses to continue to build momentum in 2002.”

The company got a strong performance from its coal operations, including the expansion of its synthetic fuel program and three facilities, which processed 2.3 million tons of coal. It increased profits at DTE Coal Services by 85%.

The addition of MichCon’s natural gas business boosted net income in the fourth quarter. MichCon was not a part of DTE Energy operations in 2000. However, it had lower electric revenues due to lower overall sales to industrial and wholesale customers driven by the recession and the legislatively mandated rate reductions for commercial and industrial customers. It also had higher electric operation and maintenance expenses.

Earley said that DTE Energy’s business plans continue to support an increase in its compound annual earnings growth rate from 6-8% by 2005. However, growth this year largely will depend on the pace of economic recovery, the impact of weather on gas sales in the first quarter and how many customers are lost to alternative electric and gas suppliers, he added.

“With these uncertainties in mind, DTE Energy is providing an earnings guidance range for 2002 of $3.70 to $4 per share,” he said. “This target range achieves year-over-year growth. The lower end of the range assumes a slower economic recovery, coupled with mild first-quarter weather. Our previously issued 2002 guidance of $4 per share will be a stretch, but is still within reach. Our non-regulated businesses, especially the coal-based fuels segment, are well-positioned for increased earnings growth next year.”

The company’s shares rose a percentage point to $41.04 on Monday.

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