PG&E Corp. said second quarter earnings suffered because ofcosts associated with electric restructuring and its sale ofAustralian assets to Duke Energy. The company reported earnings of46 cents per share, compared to 49 cents per share for thecorresponding quarter in 1997, and net income of $174 million,compared with $193 million in 2Q97. A lower rate of exchangebetween the Australian and U.S. dollar resulted in a six-centcharge taken during the second quarter, PG&E said.
The quarterly earnings also reflect a change in the way PacificGas and Electric Co. must account for revenues in connection withthe deregulation of California’s electric market, PG&E said. Inprevious years, utility ratemaking mechanisms resulted in utilityearnings that varied by season, but because of these changes 1998utility earnings are expected to be more uniform throughout theyear.
Excluding one-time gains and charges in both 1998 and 1997, theoperating earnings of the company’s unregulated businesses earned 4cents per share in the second quarter, up from 1 cent per share inthe second quarter of 1997. However in net earnings per share, theunregulated business unit lost 0.02 cents/share, compared to a 0.19cent/share gain in 2Q97.
“We are pleased with the strong aggregate performance of ourunregulated businesses in the second quarter, particularly in spiteof exceptionally weak market fundamentals in transportation ofnatural gas and natural gas liquids for our PG&E GasTransmission-Texas gas operations,” noted Glynn. “I amparticularly pleased at the performance of our Houston-based energycommodities trading affiliate, PG&E Energy Trading, whichmanaged its operations effectively during recent turbulent electricmarket activity in the Midwest.”
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