FirstEnergy Q4 Net Income Slips; Earnings Per Share Up; Sets FY08 Earnings Target - Update

(RTTNews) - FirstEnergy Corp. (FE | news | PowerRating | PR Charts ), a diversified energy company, on Monday announced a fall in its fourth quarter profit despite improved revenues, hurt by higher costs and rate cut.

Net income reported by the Akron, Ohio-based FirstEnergy for the quarter declined to $268 million from $274 million a year ago. However, earnings per share increased to $0.87 per share from $0.84 per share posted in the prior year quarter, due mainly to common stock repurchase programs, which reduced the average number of shares outstanding by 25 million since 2005. Normalized non-GAAP earnings, excluding special items, were $0.90 per share for the quarter, compared to $0.84 per share for the fourth quarter of 2006.

Quarterly revenues rose to $3.079 billion from $2.680 billion recorded in the same period last year.

Electric sales resulted in revenues of $2.882 billion, up from $2.492 billion in the corresponding quarter last year.

Electric distribution deliveries increased 3%, primarily due to colder weather. This resulted in higher distribution delivery revenues that increased earnings by $0.05 per share, but were offset by a $0.05 per share reduction in earnings resulting from a distribution rate decrease at the Metropolitan Edison Company and Pennsylvania Electric Company effective in January 2007.

FirstEnergy's total electric generation sales increased 4% boosted by higher wholesale and retail prices, as well as higher sales volume.

Higher purchased power expense, excluding JCP&L and Penn Power purchases from third-party auction suppliers, reduced earnings by $0.18 per share, primarily due to higher market prices compared to the same period last year. Higher fuel costs reduced earnings by $0.02 per share.

Increased Energy Delivery expenses reduced earnings by $0.05 per share, reflecting higher storm-related maintenance and increased system reliability spending.

For fiscal 2007 FirstEnergy reported increased net income of $1.309 billion or $4.22 per share compared to $1.254 billion or $3.81 per share in the previous year.

Normalized non-GAAP earnings for 2007, excluding special items, were $4.23 per share, compared to the prior earnings guidance of $4.15 to $4.25 per share. Last year normalized, non-GAAP earnings were $3.88 per share.

Full year revenues amounted to $11.501 billion, up from $1.301 billion recorded last year.

Looking ahead to fiscal 2008, FirstEnergy expects normalized non-GAAP earnings, excluding special items, in the range of $4.15 to $4.35 per share.

FE is trading down $0.22 or 0.31% at $70.14 on a volume of 172K shares.

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