By Edward Klump
FPL Group Inc., owner of Florida's largest utility, said first-quarter net income fell 40 percent after energy-supply contracts that lock in prices dropped in value. Utility earnings rose, lifting profit excluding the contract adjustment above analyst expectations.
Net income slid to $150 million, or 38 cents a share, from $251 million, or 64 cents, a year earlier, Juno Beach, Florida- based FPL said today in a statement. Revenue fell 14 percent to $3.08 billion.
The quarterly valuation adjustment to hedging contracts reduced profit by $126 million after resulting in a $23 million gain a year earlier, FPL said. Net income from the Florida Power & Light utility climbed 3.3 percent to $126 million.
``Putting it all together, I think it's a good quarter for stockholders,'' said Barry Abramson, who helps manage about $28 billion in assets, including 600,000 FPL shares, at Gamco Investors in Rye, New York. He noted that the company is ``successfully adding a lot of new assets.''
FPL is benefiting from rapid population growth in Florida, which added about 3 million residents in each of the past three decades. The state's population increased by more than 320,000 between July 2005 and July 2006, second only to Texas, according to the U.S. Census Bureau.
FPL's utility service territory includes two of the state's five fastest-growing counties in the past decade and part of a third. The company's average number of utility accounts grew by 98,000, or 2.2 percent, in the past year, FPL said.
Riding Growth Wave
``We continue to believe that as long as the Florida economy remains fundamentally healthy, we will continue to see good customer growth,'' Chief Financial Officer Moray Dewhurst told investors today on a conference call.
Shares of FPL rose 47 cents to $64.37 in New York Stock Exchange composite trading. The stock has climbed 18 percent this year.
Profit from FPL's competitive power business tumbled 71 percent to $45 million because of the hedging adjustment. Excluding such items, profit climbed to 70 cents a share, 9 cents higher than the average of nine analyst estimates compiled by Bloomberg.
FPL, the largest U.S. generator of wind power, has expanded by purchasing nuclear plants and building wind farms. The company's Florida Power & Light unit provides electricity to about 4.4 million homes and businesses.
The company said it examined ``structural options'' for its wind power business, such as a spinoff or an initial share sale. Current thinking is to leave the structure unchanged and increase disclosure, Dewhurst said.
One of FPL's expansion projects, the proposed Glades power plant project in Florida, will cost about $5.7 billion, Dewhurst said.
FPL Group Inc., owner of Florida's largest utility, said first-quarter net income fell 40 percent after energy-supply contracts that lock in prices dropped in value. Utility earnings rose, lifting profit excluding the contract adjustment above analyst expectations.
Net income slid to $150 million, or 38 cents a share, from $251 million, or 64 cents, a year earlier, Juno Beach, Florida- based FPL said today in a statement. Revenue fell 14 percent to $3.08 billion.
The quarterly valuation adjustment to hedging contracts reduced profit by $126 million after resulting in a $23 million gain a year earlier, FPL said. Net income from the Florida Power & Light utility climbed 3.3 percent to $126 million.
``Putting it all together, I think it's a good quarter for stockholders,'' said Barry Abramson, who helps manage about $28 billion in assets, including 600,000 FPL shares, at Gamco Investors in Rye, New York. He noted that the company is ``successfully adding a lot of new assets.''
FPL is benefiting from rapid population growth in Florida, which added about 3 million residents in each of the past three decades. The state's population increased by more than 320,000 between July 2005 and July 2006, second only to Texas, according to the U.S. Census Bureau.
FPL's utility service territory includes two of the state's five fastest-growing counties in the past decade and part of a third. The company's average number of utility accounts grew by 98,000, or 2.2 percent, in the past year, FPL said.
Riding Growth Wave
``We continue to believe that as long as the Florida economy remains fundamentally healthy, we will continue to see good customer growth,'' Chief Financial Officer Moray Dewhurst told investors today on a conference call.
Shares of FPL rose 47 cents to $64.37 in New York Stock Exchange composite trading. The stock has climbed 18 percent this year.
Profit from FPL's competitive power business tumbled 71 percent to $45 million because of the hedging adjustment. Excluding such items, profit climbed to 70 cents a share, 9 cents higher than the average of nine analyst estimates compiled by Bloomberg.
FPL, the largest U.S. generator of wind power, has expanded by purchasing nuclear plants and building wind farms. The company's Florida Power & Light unit provides electricity to about 4.4 million homes and businesses.
The company said it examined ``structural options'' for its wind power business, such as a spinoff or an initial share sale. Current thinking is to leave the structure unchanged and increase disclosure, Dewhurst said.
One of FPL's expansion projects, the proposed Glades power plant project in Florida, will cost about $5.7 billion, Dewhurst said.
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