Consolidated Edison 1st-Quarter Profit Down 31% on Charge

   By Nathalie Tadena 
 

Consolidated Edison Inc.'s (ED) first-quarter earnings fell 31% as a charge related to a lease-in lease-out transaction weighed on the utility company's bottom-line results, though revenue improved.

The utility, which serves the New York metropolitan area, faced an unprecedented challenge with superstorm Sandy last year. Con Edison said Thursday it is moving ahead with appropriate longer-term protective measures as it consults with scientists, engineers and government officials.

"Con Edison's steady performance and enduring financial stability permit the immediate initiatives underway to fortify and harden our system before the next hurricane season," said Chairman and Chief Executive Kevin Burke, adding that longer-term protective measures are moving ahead.

In January, the U.S. Court of Appeals reversed a 2009 trial court decision and disallowed tax losses claimed by the company relating to a 1997 lease in lease out transaction. As a result, Con Edison recorded a charge of $150 million in the latest period to reflect the interest on the disallowed income tax deductions and the recalculation of the accounting effect of the lease in lease out transaction.

Overall, Consolidated Edison reported a profit of $192 million, or 65 cents a share, down from $277 million, or 94 cents a share, a year earlier. Excluding a charge in the latest period related to lease in/lease out transactions and mark-to-market effects of the competitive energy businesses, ConED said earnings from ongoing operations rose to $1.08 a share from $1.01 a share.

Total operating revenue rose 3.4% to $3.18 billion.

Revenue from the electric business--ConEd's largest top-line generator by far--rose 5.2%. Gas revenue increased 15%, while steam revenue was up 26%. Nonutility revenue fell 51%.

Operating expenses increased 5.6%. Net interest expense climbed 86% to $279 million.

Shares of the company, which affirmed its full-year guidance, were down 10 cents to $63.53 after hours. The stock is up 15% since the start of the year.

Write to Nathalie Tadena at [e-mail]

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