OGE Energy 1Q Up 2.5% On Prior-Year Charges, Higher Margins

OGE Energy Corp.'s (OGE) first-quarter earnings improved 2.5% on prior-year charges and higher gross margins, which more than offset a drop in revenue and an increase in operating costs.

The electric utility company, parent to Oklahoma Gas and Electric Co., has reported generally strong results of late, due to strong growth at the Enogex LLC pipeline business. In the latest quarter, however, Enogex's fully reported earnings fell 31% as sales price per gallon of natural gas dropped 23%.

At its utility operations, revenue fell 4.9% although electricity sales increased 3.1%.

OGE posted a profit of $24.8 million, up from $24.2 million a year ago. On a per-share basis, earnings were flat at 25 cents. Excluding charges related to the U.S. government's health care overhaul, ongoing earnings a year ago would have been 36 cents. Analysts polled by Thomson Reuters expected a profit of 31 cents.

Revenue decreased 4% to $840.5 million.

Gross margin rose to 36.6% from 34.9%, but total operating costs grew 9.4%.

Shares of OGE, which reaffirmed its full-year earnings outlook, closed at $52.40 Wednesday and were inactive premarket.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]