Just like a hurricane sends offshore rig crews to shore, atempest on the stock market can drive investors to the relativesafety of utility stocks. While many energy company stock pricesare buckling under the weight of the declining market, some utilitystocks are faring rather well, thank you. Duke Energy is anexample.
Duke closed down 3/8 Tuesday at 62, not far below its 52-weekhigh of 64 5/16. The 52-week low is 44 9/16. “We have a prettystrong dividend. We have some international risk but basically notin the countries that are being talked about,” said Duke spokesmanRandy Wheeless. “I think over the last year some utility stockshave been seen as better investments, and we’d like to think thatDuke is one of those.”
Duke Energy reported 1998 second quarter basic earnings of 76cents per share, up 77% from 43 cents per share for the samequarter in 1997. Duke posted earnings for common stock of $274.4million for the second quarter compared to $157.6 million reportedfor the same quarter in 1997. Overall earnings before interest andtax (EBIT) for the second quarter of 1998 were $582.4 millionversus $407.0 million for the second quarter of 1997. The companysaid two major drivers of second-quarter earnings were increasedoverall electric sales of 14% and the absence of merger-relatedcosts from last year’s quarter of $70.4 million, or around 15 centsper share.
Southern Company also is holding its own in stormy financialseas. Southern closed down 1/8 Tuesday at 28, just 1 Â¬ point shy ofits 52-week high of 29 Â¬. PacifiCorp, on the other hand, is tradingnear the bottom of its 52-week range. The company closed Tuesdaydown 1/16 at 22 Â«. The 52-week range is 20 5/16 to 27 5/16. The lowstock price could be attributed – at least in part-to volatility inthe electric power market rather than the stock market.
PacifiCorp reported sharply lower second quarter earnings. Thecompany had second quarter 1998 earnings on common stock of $36million, or $0.12 per share, compared to $89 million, or $0.30 pershare, reported in 1997. Second quarter 1997 results included $19million, or $0.06 per share, from the company’s telecommunicationsoperations, which were sold in December of 1997. Second quarter1998 earnings were reduced by losses from unregulated electricitytrading totaling $32 million, or $0.11 per share. Losses includedcharges for known and probable future trading losses totaling $6million, or $0.02 per share, and reserves for potential creditlosses totaling $20 million, or $0.07 per share.
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