Operating earnings drop at Dominion
- October 28, 2011
Richmond-based Dominion Resources Inc., Virginia’s largest power company, had third-quarter operating earnings of $541 million, or 95 cents a share, down from $603 million, $1.03 a share, for the same period last year.
The company’s reported earnings for the three-month period ending Sept. 30 were $392 million, 69 cents a share, compared with $575 million, 98 cents a share, for the third quarter in 2010.
Dominion uses operating earnings as the primary earnings performance measurement, saying these numbers provide a more meaningful representation of the company’s fundamental earnings power.
The company attributed the decline in third-quarter 2011 operating earnings per share to lower merchant generation margins, weather-related sales in its regulated electric service territory and lower contributions from producer services. Partially offsetting these declines were higher electric transmission revenues and accretion due to share repurchases.
Thomas F. Farrell II, the company’s chairman, president and chief executive officer, said Dominion faced significant challenges during the quarter but was “up to the task and performed well. “
He noted major outages caused by Hurricane Irene and the shutdown of the company’s North Anna Power Station caused by a 5.8-magnitude earthquake in Louisa County.
“While Hurricane Irene caused major outages on our electric transmission and distribution systems, extraordinary restoration efforts were completed by our employees and workers from our neighboring utility companies,” Farrell said in a statement.
Farrell said North Anna the station is ready to return to service as soon as it gets permission from the Nuclear Regulatory Commission. Inspections have found no safety-related functional damage to the station, he said.
Company’s reported earnings included $75 million in restoration costs related to Hurricane Irene and $13 million in earthquake-related costs, primarily connected to inspections.
The company’s power generation projects include the 585-megawatt Virginia City Hybrid Energy Center in Wise County and a 1,300-megawatt gas-fired combined cycle plant in Warren County.
The Virginia City plant is more than 93 percent complete and on target to begin operation next summer, Farrell said, while, pending regulatory approval, construction on the Warren County plant is scheduled to start next spring.
Dominion expects fourth-quarter 2011 operating earnings in the range of 58 to 73 cents per share, compared with 63 cents per share in the fourth quarter of 2010.