Dominion Resources Inc. (D) third-quarter earnings rose 17% as
the electricity utility and natural-gas provider reported surprise
growth.
But it projected downbeat current-quarter earnings--55 cents to
65 cents a share compared with analysts' average estimate of 67
cents. Dominion said benefits from the gas-transmission business
and lower tax rates would be offset by higher planned outage
expenses, higher interest expense and lower volumes from its
remaining petroleum exploration-and-production operations.
The power industry has experienced a slump in demand as
consumers and industrial users cut back. Natural gas prices have
fallen more than 60% from the highs hit in the summer of 2008
because of a glut of onshore U.S. production.
However, Dominion has recently seen strength at its utilities
and higher margins at its merchant-power business, boosting the
bottom line. And Friday, the company continued to forecast strength
in its core businesses despite the cool summer. Competitors have
had that weigh on results.
Dominion posted a profit of $594 million, or $1 a share, up from
$508 million, or 87 cents a share, a year earlier. Operating
earnings rose to 99 cents from 94 cents, above July's downbeat
forecast of 88 cents to 93 cents.
Revenue decreased 16% to $3.65 billion. Analysts predicted $3.94
billion.
Earnings at Dominion Energy, which operates the oil and gas
operation, rose 17%. Dominion's electricity-generation business had
2.2% earnings growth. Dominion Virginia Power, which serves
Virginia and North Carolina, posted a 13% jump in profit.
Shares in Dominion Resources, which affirmed its 2009 and 2010
earnings views, closed Thursday at $34.63 and weren't active
premarket. The stock, which has risen about one-quarter from a
six-year low in March, remains down 3% so far this year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com