PSEG Announces 2009 First Quarter Results: $0.88 Per Share From Continuing Operations, $0.95 Per Share of Operating Earnings
May 04 2009 - 8:45AM
PR Newswire (US)
Performance Reflects Strong Operations in Difficult Markets NEWARK,
N.J., May 4 /PRNewswire-FirstCall/ -- Public Service Enterprise
Group (PSEG) (NYSE:PEG) reported today First Quarter 2009 Income
from Continuing Operations of $444 million or $0.88 per share as
compared to $435 million or $0.85 per share for the First Quarter
of 2008. Operating Earnings for the first quarter of 2009 were $482
million or $0.95 per share compared to the First Quarter of 2008
Operating Earnings of $438 million or $0.86 per share. Including
the impact of net losses on investments in our nuclear
decommissioning trust funds (NDT) of $0.04 per share and the
recognition of non-trading mark-to-market (MTM) losses of $0.03 per
share, PSEG reported Net Income for the first quarter of 2009 of
$444 million or $0.88 per share. Including the impact of net losses
on investments in NDT funds of $0.02 per share and the recognition
of non-trading MTM gains of $0.01 per share and income from
discontinued operations of $0.03 per share, PSEG reported Net
Income for the first quarter of 2008 of $448 million or $0.88 per
share. PSEG believes that the non-GAAP financial measure of
"Operating Earnings" provides a consistent and comparable measure
of performance of its businesses to help shareholders understand
performance trends. Operating Earnings exclude the impact of the
sale and/or impairment of certain non-core domestic assets and the
impact of returns/(losses) associated with NDT and MTM accounting.
The table below provides a reconciliation of PSEG's Net Income to
Operating Earnings (a non-GAAP measure) for the first quarter. See
Attachment 10 for a complete list of items excluded from Income
from Continuing Operations in the determination of Operating
Earnings. PSEG CONSOLIDATED EARNINGS (unaudited) First Quarter
Comparative Results 2009 and 2008 Income Diluted Earnings
($millions) Per Share 2009 2008 2009 2008 Net Income $444 $448
$0.88 $0.88 Less: Income from Discontinued Ops -- 13 -- 0.03 Income
From Continuing Ops $444 $435 $0.88 $0.85 Less: Excluded Items (38)
(3) (0.07) (0.01) Operating Earnings (Non-GAAP) $482 $438 $0.95
$0.86 Avg. Shares 507M 510M "PSEG's results for the first quarter
of 2009 demonstrate the strength of operations and the diversity of
our asset base in the face of difficult market conditions," said
Ralph Izzo, chairman, president and chief executive officer of
PSEG. Izzo indicated that "the market remains challenging, with
power prices down and demand softening. But, effective portfolio
management and cost control efforts give us the confidence to
manage through these difficult times." He went on to say, "We
continue to support our operating earnings guidance for 2009 of
$3.00-$3.25 per share." Operating Earnings Guidance (which remains
unchanged) by subsidiary for 2009 is as follows: 2009 Operating
Earnings Guidance ($millions) PSEG Power $1,210 - $1,285 PSE&G
320 - 345 PSEG Energy Holdings 0 - 20 PSEG Parent (10) - 0
Operating Earnings $1,520 - $1,650 Earnings Per Share $3.00 - $3.25
Operating Earnings Review and Outlook by Operating Subsidiary See
Attachment 5 for detail regarding the quarter-over-quarter
reconciliations for each of PSEG's businesses. PSEG Power PSEG
Power reported operating earnings of $359 million ($0.71 per share)
for the first quarter of 2009 compared with operating earnings of
$279 million ($0.55 per share) for the first quarter of 2008. PSEG
Power's margins in the first quarter of 2009 benefited from higher
contracted pricing and lower fuel costs ($0.18 per share). Higher
average prices in the first quarter of 2009 reflect the positive
impact of the June 2008 BGS contract on revenue as well as the
re-pricing of a below-market wholesale contract which expired at
the end of 2008. Cold weather supported demand in January; however,
more normal weather during the remainder of the quarter coupled
with a contraction in economic activity led to a reduction in
overall demand for the quarter. Power was able to take advantage of
an increase in output from its nuclear fleet as well as the
availability of low-cost gas supply to meet load requirements in
the quarter while generation from its coal-fired stations declined
quarter-over-quarter. Included in Power's first quarter margin
improvement is income associated with the termination of positions
with counterparties which accelerated the recognition of income
which would have been realized later in the year. This item
represented $0.03 per share of the $0.18 per share improvement in
first quarter margin. The nuclear fleet continued its strong
operations with an average capacity factor of 97.8% in the quarter.
This compares with an average capacity factor of 94.1% during the
year-ago quarter. Production from the nuclear fleet also benefited
from an uprate in the capacity of Hope Creek and Salem 2 (173MW)
completed during the second quarter of 2008. Power's earnings saw
an increase in margin under the BGSS contract ($0.01 per share).
Quarter-over-quarter earnings comparisons were also affected by an
anticipated increase in operating and maintenance expense in 2009
associated with planned outage work at the fossil stations ($0.01
per share) and nuclear stations ($0.01 per share). An increase in
depreciation and interest expense reduced earnings comparisons by
$0.01 per share. For the year, PSEG Power's operating earnings
forecast reflects the benefit of higher electric power pricing. The
operation of competitive energy and capacity markets has allowed
Power to hedge 100% of its expected coal and nuclear output in
2009. The improvement in margins during the remainder of the year,
however, is not expected to be as strong as that experienced in the
first part of the year. PSE&G PSE&G reported operating
earnings of $123 million ($0.24 per share) for the first quarter
compared with operating earnings of $136 million ($0.26 per share)
for the first quarter of 2008. The results for the quarter were
affected by several factors. Colder than normal weather increased
the demand for gas. Degree Days were 8.5% higher than the level
experienced in 2008's first quarter, and 3.3% greater than normal
causing gas sales to increase by 3.1% in the quarter versus last
year. The quarter-over-quarter increase in sales was led by a 7.8%
increase in gas sales to the residential sector. The
weather-related increase in sales contributed $0.03 per share to
earnings. Growth in demand continues to be constrained by poor
economic conditions. This reduced demand negatively affected
non-firm sales to the commercial and industrial sectors and hurt
earnings by $0.01 per share in the quarter. Earnings were aided by
an increase in transmission revenues effective on October 1, 2008
($0.01 per share). The increase in margin was offset by higher
pension and operating and maintenance expense ($0.01 per share).
Depreciation expense increased with a higher level of capital
spending ($0.01 per share). Earnings comparisons were also affected
by the absence of tax benefits recognized in the first quarter of
2008 ($0.02 per share). PSE&G is expected to experience a
decline in 2009 operating earnings. Demand is expected to remain
weak in response to a contraction in economic growth. Results will
also reflect an increase in pension expense as well as higher
levels of depreciation expense associated with the start-up of
PSE&G's new customer information system and an increase in
financing costs associated with increased capital outlays.
PSE&G is preparing to file a combined electric and gas rate
case by mid-year. The request will primarily address the company's
increased level of capital spending and pension related costs. The
quarter was marked by the New Jersey BPU's approval of PSE&G's
proposal to accelerate capital spending as a means of meeting the
Governor's call for programs to stimulate the economy. PSE&G
plans to spend $694 million on electric and gas programs over 24
months with approximately $190 million to be spent in 2009. These
amounts will be recovered through a new capital adjustment charge
(approved separate from base rates) designed to provide immediate
recovery of a return on the program expenditures plus depreciation
of the assets. PSEG Energy Holdings PSEG Energy Holdings reported
operating earnings of $4 million ($0.01 per share) versus operating
earnings of $28 million ($0.06 per share) during the first quarter
of 2008. The decline in operating earnings for the quarter was
influenced by several factors. A reduction in gas prices reduced
the profitability of the combined cycle gas assets in Texas ($0.01
per share). The Texas generating units performed better than a year
ago in what remains a difficult market. The absence of tax benefits
recorded in 2008 ($0.02 per share) also hurt earnings. Earnings
from Resources were hurt by a reduction in income on the lease
portfolio ($0.02 per share) and an increase in taxes ($0.03 per
share). These items more than offset the gain recorded on the
termination of leases during the quarter ($0.03 per share). The
termination of leases during the quarter reduced Resources
investment in international leases to $924 million at the end of
March 2009 from $1.0 billion at the end of 2008. PSEG Energy
Holdings' operating income is expected to decline in 2009. The
outlook reflects difficult market conditions in Texas for the
gas-fired assets with a decline in power prices and spark spreads
year over year. The results will also be affected by a full-year
decline in the return on Resources leveraged lease portfolio. These
items will more than offset the benefits of a reduction in interest
expense associated with the redemption, in February 2009, of $280
million of non-recourse debt on the Texas assets. The following
attachments can be found on http://www.pseg.com/ Attachment 1 -
Operating Earnings and Per Share Results by Subsidiary Attachment 2
- Consolidating Statements of Operations Attachment 3 -
Capitalization Schedule Attachment 4 - Condensed Consolidated
Statements of Cash Flows Attachment 5 - Quarter-to-Quarter EPS
Reconciliation Attachment 6 - Generation Measures Attachment 7 -
Retail Sales and Revenues Attachment 8 - Retail Sales and Revenues
Attachment 9 - Statistical Measures Attachment 10 - Reconciling
Items Excluded from Continuing Operations to Compute Operating
Earnings FORWARD-LOOKING STATEMENT Readers are cautioned that
statements contained in this press release about our and our
subsidiaries' future performance, including future revenues,
earnings, strategies, prospects and all other statements that are
not purely historical, are forward-looking statements for purposes
of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Although we believe that our
expectations are based on reasonable assumptions, we can give no
assurance they will be achieved. The results or events predicted in
these statements may differ materially from actual results or
events. Factors which could cause results or events to differ from
current expectations include, but are not limited to: -- Adverse
Changes in energy industry, policies and regulation, including
market rules that may adversely affect our operating results. --
New energy legislation. -- Any inability of our energy transmission
and distribution businesses to obtain adequate and timely rate
relief and/or regulatory approvals from federal and/or state
regulators. -- Changes in federal and/or state environmental
regulations that could increase our costs or limit operations of
our generating units. -- Changes in nuclear regulation and/or
developments in the nuclear power industry generally, that could
limit operations of our nuclear generating units. -- Actions or
activities at one of our nuclear units that might adversely affect
our ability to continue to operate that unit or other units at the
same site. -- Any inability to balance our energy obligations,
available supply and trading risks. -- Any deterioration in our
credit quality. -- Any inability to realize anticipated tax
benefits or retain tax credits. -- Increases in the cost of or
interruption in the supply of fuel and other commodities necessary
to the operation of our generating units. -- Delays or cost
escalations in our construction and development activities. --
Adverse investment performance of our decommissioning and defined
benefit plan trust funds and changes in discount rates and funding
requirements. -- Changes in technology and/or increased customer
conservation. For further information, please refer to our Annual
Report on Form 10-K, including item 1A. Risk Factors, and
subsequent reports on Form 10-Q and Form 8-K filed with the
Securities and Exchange Commission. These documents address in
further detail our business, industry issues and other factors that
could cause actual results to differ materially from those
indicated in this release. In addition, any forward-looking
statements included herein represent our estimates only as of today
and should not be relied upon as representing our estimates as of
any subsequent date. While we may elect to update forward-looking
statements from time to time, we specifically disclaim any
obligation to do so, even if our estimates change, unless otherwise
required by applicable securities laws. DATASOURCE: Public Service
Enterprise Group (PSEG) CONTACT: Jenn Kramer for PSEG,
+1-973-430-6027 Web Site: http://www.pseg.com/
Copyright
Public Service Enterprise (NYSE:PEG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Public Service Enterprise (NYSE:PEG)
Historical Stock Chart
From Jul 2023 to Jul 2024