Despite another nagging loss in consolidated net income, Sioux Falls, SD-based NorthWestern Corp. reported a profit ($6.4 million, or 18 cents/share) from continuing operations for the second quarter, compared to a loss of $14.4 million from continuing operations for the same period last year.
On a consolidated basis, the utility holding company reported a net loss of $3.9 million, or 11 cents/share, for the second quarter, compared with a consolidated net loss of $4.8 million in the second quarter of 2004.
NorthWestern said that the second quarter 2005 results included a $10.3 million after-tax loss from discontinued operations, primarily related to the settlement reached with securities class action claimants in the company’s Chapter 11 bankruptcy proceedings that involved a subsidiary, Netexit Inc. NorthWestern emerged from Chapter 11 last November.
For the first six months of 2005, NorthWestern reported consolidated net income of $15 million, or 42 cents/share, an improvement of $2.8 million, or 23%, compared with the $12.2 million of net income in the first six months of 2004.
CEO Michael Hanson said the results from ongoing operations were an indication of the company’s “continuing successful restructuring that is proceeding at a faster pace than was envisioned last November.” He called the continuing utility operations results “significant year-over-year improvement due primarily to higher gross margins from regulated electric and natural gas segments and our unregulated electric segment.”
In response to questions on a conference call related to the so-far rejected move by a group of Montana cities to purchase NorthWestern’s utility operations in the state (see Power Market Today, July 8) and its residual impact on relations with Montana regulators, Hanson said the company is working closely with the Montana Public Service Commission staff and recent approvals from the regulatory commission on new power plant projects bode well for the company’s relations.
“Whatever the past history was, our recent interactions with the commission staff have been very constructive and we will try hard to keep it that way,” Hanson said.
Now that the company has trimmed it debt, Hanson was also asked what NorthWestern planned for its so-called “free cash flow,” and he indicated that the company’s board would decide among various options, including further dividend increases, investments in new electric transmission projects, restructuring various qualifying facility purchased power contracts, and buying out a current lease-hold interest in Coal Strip No. 4 power plant.
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