PNM Resources, the parent of Public Service Company of New Mexico, reported higher third quarter earnings on Friday of $27.4 million, or 45 cents/diluted share, compared to net earnings of $16.6 million, or 27 cents/share for the same period last year. Year-to-date (nine-month) earnings per share increased 3.7% to $1.13/diluted share, the holding company said.
What the parent company called “strong retail electric and natural gas customer growth, and wholesale long-term contracts, drove increases in revenues” for the latest three-month period. PNM said it continued to “control operating costs” during the quarter, but cooler-than-expected weather did “dampen” the utility’s retail and wholesale margins.
PNM said its ongoing refinancing activities drove down its overall interest expenses in the third quarter and for the nine-month period. In addition, the utility’s San Juan coal-fired generation plant continues to operate “favorably,” and coal costs continued to decline, the company said.
Noting that it was offset by lower operating costs and interest expenses, the utility’s consolidated gross margin (operating revenues less cost of energy) decreased about $10.7 million, or 6.3%, compared to the same three-month period in 2003. Retail electric, gas and transmission gross margin decreased $6.7 million, from $143.7 million in the third quarter last year to $137 million in the latest quarter, PNM said.
“The reduction in utility gross margin for the third quarter was primarily due to the electric rate decrease implemented in September 2003 and to decreased sales volumes caused by cooler weather, as cooling degree-days declined over 28% quarter-over-quarter,” PNM said, adding that “weather-adjusted” electric load growth remains “strong” at 4% for the quarter.
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