UniSource Sees Lower Quarterly Earnings
Posted on: Tuesday, 20 May 2008, 09:01 CDT
By SHELLEY SHELTON
CORRECTION RAN MAY 10, 2008 A2
* A story Friday on D1, "Unisource sees lower quarterly earnings," incorrectly stated the first-quarter financial results for UniSource Energy Corp., parent company of Tucson Electric Power Co. UniSource reported a net loss for the first quarter of $3 million, or 7 cents per share.
UniSource Energy Corp., parent of Tucson Electric Power Co., posted lower first-quarter earnings Thursday, attributing the decline to increased fuel costs and higher prices for wholesale energy at TEP.
UniSource reported net income for the first quarter of $3 million, or 7 cents per share, compared with $5 million, or 14 cents a share, a year ago.
Operating revenue grew 3.9 percent to $330 million, the company reported after the close of trading Thursday.
The company withdrew its previously issued earnings outlook for 2008 "because it is unable to predict UniSource Energy's 2008 full- year earnings within a reasonable range."
The company previously said it expected this year's earnings to be between $1.70 and $2.20 per share.
"I was way off, because I had them at 25 cents in the first quarter, positive," said Maurice E. May, an analyst for Power Insights-Soleil in Westport, Mass. May also manages a family trust that has shares in UniSource.
Even so, May said he still rates the company as a "buy" and has a price target of $34.50. UniSource shares closed at $30.46 Thursday in trading on the New York Stock Exchange.
"The increased cost of fuel and purchased power cannot be offset because there is no fuel adjustment clause at Tucson Electric Power," May said.
Virtually all utilities, except in West Virginia and New Mexico, have fuel clauses, he said, and added that the Arizona Corporation Commission staff has recommended such a clause in the pending TEP rate case.
In a statement, James Pignatelli, president and CEO of UniSource and TEP, said the second and third quarters of 2008 are likely to fall below last year's levels as well if wholesale power prices and natural-gas costs remain high.
* Contact reporter Shelley Shelton at 434-4086 or sshelton@azstarnet.com.
Originally published by SHELLEY SHELTON, ARIZONA DAILY STAR.
(c) 2008 Arizona Daily Star. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Arizona Daily Star
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