Progress Energy 4Q Net Up 4% On Higher Margins

   DOW JONES NEWSWIRES 
 

Progress Energy Inc.'s (PGN) fourth-quarter net income rose 4% amid improved margins due to lower depreciation costs.

The tight credit market combined with slipping demand has pinched electric utilities, who are struggling to keep rates low while generating enough funds to support their own expenses. To boost liquidity, Progress Energy last month joined a host of companies to cut capital spending, saying it would lower its planned 2009 target by $250 million.

The company posted net income of $107 million, or 41 cents a share, up from $103 million, or 40 cents a share a year earlier. Discontinued operations and other impacts shaved 6 cents from the latest quarter's profit.

Revenue fell 2% to $2.16 billion.

Analysts polled by Thomson Reuters expected 46 cents per share and $2.35 billion, respectively.

Operating margin increased to 14.9% from 12.9% on the drop in depreciation costs caused by the company's accelerated cost-recovery program for its nuclear power plants.

Progress Energy, which reiterated its 2009 earnings forecast, has reduced business risk by exiting non-regulated businesses, including a merchant plant and a natural gas exploration and production business. Instead, the company has focused on developing new power plants.

Shares of Progress Energy, which are off 15% from its 52-week high, closed Wednesday at $38.70. There was no premarket trading.

-By Katherine E. Wegert, Dow Jones Newswires; 201-938-5400; [e-mail]

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