PPL 2nd-Quarter Net Up 49% on Hedging-Related Gains

   By John Kell 
 

PPL Corp.'s (PPL) second-quarter earnings rose 49% as the public utility's bottom line was bolstered by hedging-related gains, and as profitability grew for each of the company's regulated utility segments.

The company also raised its full-year profit outlook, now seeing $2.25 to $2.40 a share in ongoing earnings, up from the May view of $2.15 to $2.40.

PPL has been aiming to increase its presence in regulated-power markets as wholesale generators across the industry have been hurt by stubbornly low natural-gas prices. The company more than doubled the number of PPL's regulated utility customers through the 2011 acquisition of two Kentucky utilities and an electric-distribution business in the U.K. Midlands.

PPL reported a profit of $405 million, or 63 cents a share, up from $271 million, or 46 cents a share, a year earlier. Excluding some energy-related economic activity and other items, earnings from ongoing operations fell to 49 cents from 51 cents.

Revenue grew 35% to $3.45 billion, as the latest quarter included a $590 million gain from energy-related contracts that hedge future cash flows. The prior-year period had a loss of $458 million for that same metric.

Analysts surveyed by Thomson Reuters expected a profit of 46 cents a share on revenue of $2.63 billion.

Earnings from ongoing operations in the supply segment--primarily the competitive electricity generation and energy-marketing operations of PPL Energy Supply--decreased by seven cents a share to a penny a share, hurt by lower energy prices.

Ongoing operations from the company's U.K. regulated operations grew by to 35 cents from 31 cents, primarily due to higher electricity prices and volume due to the weather.

The Kentucky regulated segment's earnings climbed to eight cents a share from seven cents as higher electricity and gas rates were somewhat offset by lower volume.

Shares closed Wednesday at $31.77 and were inactive in premarket trading. The stock has gained 11% in 2013, slightly underperforming the broader market.

Write to John Kell at [e-mail]

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