Green MT Power (NYSE:GMP)
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From Aug 2019 to Aug 2024
Green Mountain Power Corporation (NYSE: GMP) today
announced consolidated earnings of $0.48 per share of common stock,
diluted, for the third quarter of 2005 compared with consolidated
earnings of $0.65 per share of common stock, diluted, for the same
period in 2004. Year to date earnings for 2005 are $1.50 per share,
diluted, compared with earnings of $1.70 per share, diluted for the
first nine months of 2004.
Earnings declined in the third quarter of 2005 primarily as a
result of higher power supply, other operating and transmission
expenses partially offset by an increase in retail revenues. "The
earnings decline in 2005 was caused in large part by significantly
higher wholesale energy prices," said Christopher L. Dutton, President
and Chief Executive Officer. "We expect earnings to bounce back in the
fourth quarter as the Company has more power supply than anticipated
demand, but not enough to counter the weakness we experienced during
the third quarter. As a result, we are revising our forecast of 2005
earnings to be within a range of $1.90 and $2.10 per share as compared
with previous guidance of $2.08 to $2.19 per share."
The Company has long-term, essentially fixed-price, power supply
contracts that cover over 90 percent of customer demand under normal
weather conditions. Nonetheless we were exposed to higher energy
prices in the third quarter of 2005, including lost margins on
incremental sales, increased costs of energy lost over the
transmission system (line losses) and higher allocated costs from ISO
New England for congestion and other ancillary energy services.
Hurricanes Katrina and Rita and a very hot summer sent New England
wholesale electricity prices sharply higher in the third quarter.
"Cash flow has been strong in 2005, and we expect to increase our
annual dividend by 12 cents per share in the first quarter of 2006,
consistent with our dividend growth over the last few years, so long
as financial and operating results permit," said Mr. Dutton. "Even
after the anticipated 2006 dividend increase, the Company's payout
ratio will be below most other comparable utilities, and we expect to
continue our dividend growth policy until we reach the middle of a
payout range of between 50 and 70 percent of earnings."
The Vermont Public Service Board issued an order in December 2003
allowing the Company to carry unused deferred revenue totaling
approximately $3.0 million to 2004 and to recognize this revenue to
achieve its allowed rate of return during 2004. During the third
quarter of 2004, the Company's earnings benefited by $0.05 per share
as a result of recognizing deferred revenues, compared with no
recognition of deferred revenue during the same period of 2005. A rate
increase of 1.9 percent effective in January 2005 resulted in the
replacement of deferred revenues with cash revenues and has
contributed to strong cash flows in 2005.
Retail operating revenues for the third quarter of 2005 increased
by $6.4 million compared with the same period in 2004, reflecting the
effects of warmer summer weather, increased sales of utility services
to other municipalities and utilities, the 1.9 percent rate increase
and an increase in the number of customers. Total retail megawatt hour
sales of electricity increased by 6.6 percent in the third quarter of
2005, compared with the same period in 2004. Sales to residential and
small commercial and industrial customers increased by 13.4 percent
and 8.2 percent, respectively, compared with the third quarter in
2004. By contrast, sales to large commercial and industrial customers
decreased by 0.2 percent in the third quarter of 2005 compared with
the same quarter last year. Increased revenues from the sale of
utility services to other utilities and large industrial customers in
the third quarter of 2005 also contributed approximately $2.1 million
to retail revenue growth, when compared to the same period last year.
Other operating expenses increased by $1.9 million in the third
quarter of 2005, reflecting an increase of $1.7 million in utility
services expense. These sales of services are intended to allow the
Company to recover some of its administrative and general and staffing
costs from other parties and ultimately reduce costs to customers.
Wholesale revenues in the third quarter of 2005 also increased by $2.3
million compared with the third quarter of 2004, reflecting higher
energy prices.
Power supply expenses increased $6.3 million in the third quarter
of 2005 compared with the same quarter of 2004 due to increased costs
of market purchases to serve marginal load, and increased costs of
transmission line losses and congestion costs allocated within the New
England power pool by ISO New England. Congestion charges represent
the cost of delivering energy to customers and reflect energy prices,
customer demands, and the availability of transmission and generation
resources. The Company paid an average market price of approximately
$103 per megawatt hour for system purchases during hours when customer
demand exceeded supply during the third quarter of 2005, compared to
$41 per megawatt hour in the same period last year, inclusive of the
effects of congestion and line losses.
Transmission expenses increased by $600,000 in the third quarter
of 2005 compared with the same period last year, primarily as a result
of increased energy purchases. The Company's future growth will
benefit from expanded transmission investment by VELCO, principally
for the construction of high voltage transmission lines in Vermont.
The Northwest Reliability Project is the most significant component of
that expanded investment. The Vermont Public Service Board has issued
a certificate of public good for the project and VELCO has begun
construction of this project.
In other developments, Green Mountain Power will be recognized by
the Edison Electric Institute next week as the top-performing
small-cap company in its Index of Shareholder-Owned Electric Utilities
for the past five years. The index values total return over a
five-year period.
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Green Mountain Power Corporation
in thousands except per share amounts
Quarterly Earnings Summary
Three Months Ended Nine months ended
September 30 September 30
2005 2004 2005 2004
-------- ------- -------- --------
Retail revenues $ 57,584 $51,224 $162,874 $154,838
Wholesale revenues 6,740 4,443 14,586 19,220
-------- ------- -------- --------
Total operating revenues $ 64,324 $55,667 $177,460 $174,058
-------- ------- -------- --------
Net income $ 2,542 $ 3,390 $ 7,902 $ 8,906
Net income applicable to common
stock 2,542 3,390 7,902 8,906
Net income-continuing
operations 2,524 3,392 7,900 8,915
Net income(loss)-discontinued
operations 18 (2) 2 (9)
Basic earnings per common share $ 0.49 $ 0.67 $ 1.52 $ 1.76
Fully diluted earnings per
common share $ 0.48 $ 0.65 $ 1.50 $ 1.70
Dividends declared per share $ 0.25 $ 0.22 $ 0.75 $ 0.66
Weighted average shares of
common stock outstanding-Basic 5,208 5,089 5,185 5,068
Weighted average shares of
common stock outstanding-
Diluted 5,301 5,251 5,284 5,238
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There are statements in this information release that contain
projections or estimates and that are considered to be
"forward-looking" as defined by the Securities and Exchange Commission
(the "SEC"). In these statements, you may find words such as believes,
expects, plans, or similar words. These statements are not guarantees
of our future performance. There are risks, uncertainties and other
factors that could cause actual results to be different from those
projected.
For further information, please contact Dorothy Schnure, Manager
of Corporate Communications, at 802-655-8418 or Robert Griffin, Vice
President, Chief Financial Officer and Treasurer, at 802-655-8452.