DOW JONES NEWSWIRES 
 

Public Service Enterprise Group Inc. (PEG) swung to a second-quarter profit on strength in its power-generation business amid higher prices as the New Jersey-based electricity provider continues to deal with lower demand at its power-generation business and cooler weather.

The company has been able to manage through the weaker power usage with lower fuel costs and minimizing other costs, including reducing the use of coal-fired plants. The company had said in May that it expected warmer weather to drive stronger demand than usual in the summer.

But Chairman and Chief Executive Ralph Izzo said the company's results have been hurt by the second-coolest June since 1970. He added the "abnormally cool" weather through the end of July will challenge the company's ability to meet the upper end of its full-year outlook, which it reaffirmed.

The company posted income of $311 million, or 61 cents a share, compared with a year-earlier loss of $150 million, or 29 cents a share. Excluding items, earnings rose to 63 cents from 61 cents. Analysts polled by Thomson Reuters expected earnings of 62 cents.

Revenue figures weren't provided by PSEG in a press release detailing the quarterly results.

The company's New Jersey-based utility segment reported a 10% increase in profit as margins benefited from higher average prices, although generation fell 15% in the quarter amid the recession and cool weather.

PSEG's power-generation business saw earnings fall 16% on weaker demand for electricity.

Wednesday, the company said New Jersey regulators cleared it to spend $515 million on 80 megawatts worth of solar-power projects across the state through the end of 2013. The program will be paid for with electric-rate increases, with costs offset by federal and state tax credits.

PSEG's shares closed Thursday at $33.43 and haven't traded premarket.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com