PPL 4th-Quarter Net Down 21% Amid Supply Segment Weakness

   By Ben Fox Rubin 
 

PPL Corp.'s (PPL) fourth-quarter profit fell 21% as the public utility's revenue sank and its supply segment weakened.

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. As part of that goal, the company in 2011 closed on deals valued at more than $14 billion to acquire two Kentucky utilities and an electric-distribution business in the U.K. Midlands--a move that more than doubled the number of PPL's regulated utility customers.

PPL reported a profit of $359 million, or 60 cents a share, down from $454 million, or 78 cents a share, a year earlier. Excluding some hedging-related activity, write-downs and other items, earnings from ongoing operations fell to 49 cents from 71 cents.

Revenue slipped 24% to $3.22 billion, as unrealized economic activity in wholesale energy marketing, which includes hedging, was $11 million, compared with $1.18 billion the year before.

Analysts polled by Thomson Reuters most recently projected ongoing earnings of 47 cents on revenue of $2.47 billion.

Earnings from ongoing operations in the supply segment--primarily the competitive electricity generation and energy marketing operations of PPL Energy Supply--fell to seven cents a share from 27 cents, due in part to lower nuclear and fossil-fuel generation output in the East and higher operation and maintenance expense.

Ongoing earnings from the company's U.K. regulated operations rose to 29 cents a share from 28 cents the year before on higher delivery revenue.

The Kentucky regulated segment's earnings were up at eight cents a share from six cents primarily due to higher retail margins.

The company also forecast 2013 earnings of $2.25 to $2.50 a share, compared with estimates of $2.42 from analysts polled by Thomson Reuters. PPL said it expects lower earnings in 2013 compared with 2012, primarily due to lower energy margins in the supply segment.

PPL also raised its quarterly dividend to 36.75 cents a share from 36 cents.

Shares closed Wednesday at $30.47 and were inactive premarket. The stock is up 8.9% over the past three months.

Write to Ben Fox Rubin at [e-mail]

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