Central Vermont Public Service (NYSE: CV)
-- First-quarter earnings of $8.4 million, or 62 cents per diluted share,
27 cents higher than 2010
-- $6.1 million increase in operating revenues
-- $3.0 million increase in regulatory amortization expense
-- $1.8 million decrease in service restoration costs
-- $1.5 million increase in equity in earnings of affiliates
-- 2011 earnings forecast reaffirmed in the range of $1.60 to $1.75 per
diluted share.
Central Vermont Public Service (NYSE: CV) reported consolidated
earnings of $8.4 million, or 62 cents per diluted share of common
stock, for the first three months of 2011, compared to $4.2
million, or 35 cents per diluted share of common stock, for the
same period in 2010. The improved earnings were driven in part by
increases in operating revenue and decreases in operating expenses
and storm restoration costs compared to the first quarter of
2010.
"First quarter earnings were significantly improved compared to
the same period last year," President and CEO Larry Reilly said.
"Our improved performance reflects differences in weather effects,
timing of some expenditures, and higher sales volume, which
increased due to colder winter weather and the slowly improving
economy in the state.
"Going forward, we will continue to focus heavily on customer
service and reliability, while maintaining close attention to cost
control," Reilly said. "We firmly believe that creating value for
our customers is critical to creating value for our shareholders.
They are irrevocably intertwined."
First quarter 2011 results compared to 2010
First quarter operating revenues increased $6.1 million,
including a $7.2 million increase in retail revenues, a $3.3
million increase from provision for rate refund, partially offset
by a $3.6 million decrease in resale revenue, and a $0.8 million
decrease in other operating revenues.
The increase in retail revenues primarily resulted from a 7.46
percent base rate increase, effective January 1, 2011 and higher
customer usage, due to colder weather in 2011. The provision for
rate refund is related to deferrals and refunds as required by the
power cost adjustment clause within our alternative regulation
plan. Resale revenue decreased due to lower 2011 contract prices
associated with the sale of our excess energy, and lower volume
available for resale due to higher retail load. Other operating
revenues decreased primarily due to mutual aid for other utilities
in 2010.
Purchased power expense decreased $0.4 million due to a $1.3
million decrease resulting from lower capacity costs, lower volume
and lower market rates from ISO-NE, partially offset by an increase
of $0.8 million due to higher output at the Vermont Yankee plant in
2011 and higher related capacity costs.
Other operating expenses increased $1.8 million due to a $3
million increase from higher regulatory amortizations including
$4.1 million of 2010 exogenous costs related to major storms and
tax law changes, partially offset by $0.9 million of 2008 major
storm costs recovered in 2010; a $0.8 million increase in
transmission expenses driven by higher rates from ISO-NE, and
higher Vermont Transmission Agreement billings due to higher
specific facility charges, partially offset by higher NEPOOL Open
Access Transmission Tariff reimbursements; and a $1 million
increase in operating income tax expense as a result of a higher
level of earnings. These increases were partially offset by an
unfavorable charge of $0.7 million in the first quarter of 2010
required by health care reform legislation and $1.8 million in
service restoration costs incurred for a major storm in February
2010.
Equity in earnings of affiliates increased $1.5 million, due to
the return on the $34.9 million investment that we made in Transco
in December 2010.
2010 Common Stock Issuance
Earnings per share for 2011 reflect the impact of shares issued
under our at-the-market program. From April to December 2010, CV
sold an aggregate of 1,498,745 shares in open market trading and
direct placements under this program for aggregate gross proceeds
of approximately $30.6 million. The net proceeds of the offering
were used for general corporate purposes.
2011 Earnings Guidance
CV reaffirmed its previously announced guidance range for 2011
earnings of $1.60 to $1.75 per diluted share. The earnings range
reflects an approved retail rate increase of 7.46 percent effective
January 1, 2011 and an allowed rate of return of 9.45 percent in
2011.
Webcast
CV hosted an earnings teleconference and webcast on May 6, 2011,
beginning at 2 p.m. Eastern Time. At that time, CV President and
CEO Larry Reilly and Chief Financial Officer Pamela Keefe discussed
the company's financial results, as well as progress made toward
achieving the company's long-term strategy.
Interested parties may listen to the conference call live on the
Internet by selecting the "CVPS 2011 First Quarter Earnings Call"
link on the "Investor Relations" section of the company's website
at www.cvps.com. An audio archive of the call will be available
later that day at the same location or by dialing 1-877-660-6853
within the U.S. or internationally by dialing 1-201-612-7415 and
entering Account 286 and Conference ID 370724.
About CV
CV is Vermont's largest electric utility, serving more than
159,000 customers statewide. CV's non-regulated subsidiary,
Catamount Resources Corporation, sells and rents electric water
heaters through a subsidiary, SmartEnergy Water Heating
Services.
Form 10-Q
On Thursday, May 5, 2011, the company filed its quarterly Form
10-Q with the Securities and Exchange Commission. A copy of that
report is available on our web site, www.cvps.com, under the
"Investor Relations" section. Please refer to it for additional
information regarding our condensed consolidated financial
statements, results of operations, capital resources and
liquidity.
Reconciliation of Earnings Per Diluted Share
First
Quarter
2011 vs.
2010
---------
2010 Earnings per diluted share $ 0.35
Major Income Statement Variances:
Higher operating revenue 0.30
Lower service restoration expenses 0.09
Higher equity in earnings of affiliates 0.07
Lower purchased power expense 0.02
Higher regulatory amortizations (0.14)
Higher transmission expenses (0.04)
Other (includes income tax adjustments, impact of additional
common shares and various items) (0.03)
---------
2011 Earnings per diluted share $ 0.62
=========
Forward-Looking Statements
Statements contained in this press release that are not
historical fact are forward-looking statements intended to qualify
for the safe-harbors from the liability established by the Private
Securities Litigation Reform Act of 1995. Statements made that are
not historical facts are forward-looking and, accordingly, involve
estimates, assumptions, risks and uncertainties that could cause
actual results or outcomes to differ materially from those
expressed in the forward-looking statements. Actual results will
depend, among other things, upon the actions of regulators,
performance of the Vermont Yankee nuclear power plant, effects of
and changes in weather and economic conditions, volatility in
wholesale electric markets, volatility in the financial markets,
and our ability to maintain our current credit ratings. These and
other risk factors are detailed in CV's Securities and Exchange
Commission filings. CV cannot predict the outcome of any of these
matters; accordingly, there can be no assurance that such indicated
results will be realized. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of
the date of this press release. CV does not undertake any
obligation to publicly release any revision to these
forward-looking statements to reflect events or circumstances after
the date of this press release.
Central Vermont Public Service Corporation - Consolidated
Earnings Release
(dollars in thousands, except per share amounts)
Three Months Ended
March 31
Condensed Income Statement 2011 2010
---------- ----------
Operating revenues:
Retail sales $ 83,258 $ 76,062
Resale sales 7,695 11,339
Provision for rate refund 3,391 125
Other 2,741 3,481
---------- ----------
Total operating revenues 97,085 91,007
---------- ----------
Operating expenses:
Purchased power - affiliates and other 41,352 41,718
Other operating expenses 45,948 44,196
Income tax expense 2,857 1,838
---------- ----------
Total operating expense 90,157 87,752
---------- ----------
Utility operating income 6,928 3,255
---------- ----------
Other income:
Equity in earnings of affiliates 6,941 5,395
Other, net 105 36
Income tax expense (2,302) (1,589)
---------- ----------
Total other income 4,744 3,842
---------- ----------
Interest expense 3,247 2,895
---------- ----------
Net income 8,425 4,202
Dividends declared on preferred stock 92 92
---------- ----------
Earnings available for common stock $ 8,333 $ 4,110
========== ==========
Per Common Share Data
Earnings per share of common stock - basic $ 0.62 $ 0.35
Earnings per share of common stock - diluted $ 0.62 $ 0.35
Average shares of common stock outstanding - basic 13,353,973 11,725,484
Average shares of common stock outstanding -
diluted 13,406,926 11,756,303
Dividends declared per share of common stock $ 0.46 $ 0.46
Dividends paid per share of common stock $ 0.23 $ 0.23
Supplemental Financial Statement Data
Balance sheet
Investments in affiliates $ 174,893 $ 132,439
Total assets $ 700,016 $ 627,692
Common stock equity $ 275,248 $ 230,513
Long-term debt (excluding current portions) $ 188,300 $ 188,233
Cash Flows
Cash and cash equivalents at beginning of period $ 2,676 $ 2,069
Cash provided by operating activities 32,382 24,942
Cash used for investing activities (2,824) (6,007)
Cash used by financing activities (17,105) (15,866)
---------- ----------
Cash and cash equivalents at end of period $ 15,129 $ 5,138
========== ==========
Refer to our first-quarter 2011 Form 10-Q for additional information
Media Inquiries: Steve Costello Director of Public Affairs (802)
747-5427 e-mail: Email Contact (802) 742-3062 (pager) Contact:
Pamela Keefe Senior Vice President, Chief Financial Officer and
Treasurer (802) 747-5435 e-mail: Email Contact
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