Allete earnings up despite lower third-quarter resultsSo far this year, Allete is reporting net income up 5 percent over the same period last year.
By: News Tribune staff, Duluth News Tribune
So far this year, Allete is reporting net income up 5 percent over the same period last year.
The Duluth-based energy company has reported net income of $71.7 million for the year’s first nine months, compared to $68.2 million for the same period in 2012. Operating revenues were up to $750.4 million, compared to $705.2 million last year.
The increases come despite lowered third-quarter earnings, which company officials are attributing to reduced sales due to cooler summer weather coupled with increased property taxes and other expenses.
Company officials expected lower third-quarter results, but not quite this low. Company-wide, earnings for July through September were 63 cents per share on a net income of $25.2 million. That’s down from 2012’s third-quarter earnings of 78 cents per share on net income of $29.4 million. Meanwhile, operating revenues increased from $248.8 million last year to $251 million this year.
Allete’s electric utilities — Minnesota Power and Superior Water, Light & Power — also showed decreased income. Net income in the third quarter was $24.6 million, down from $29.3 million last year.
According to an Allete news release, cooler summer weather reduced sales from Minnesota Power’s residential, commercial and municipal customers. The result was a three-cent cut in earnings per share.
Minnesota Power’s taconite customers, however, continued to operate at near full capacity and were not negatively affected by the weather.
The expected lower quarterly earnings were reduced further by several additional factors, said Alan R. Hodnik, Allete chairman, president and CEO.
“Property tax expense has been higher than expected, and we have had a slight delay in our capital spending,” Hodnik said in a prepared statement. “We also had lower municipal sales than projected, primarily due to the timing of the Essar Steel Minnesota project. All of these contributed to lower earnings than projected during the third quarter.”
With the year-to-date financial results and the delayed startup of the Essar Steel Minnesota project, the company now projects 2013 earnings to be between $2.58 and $2.68 per share, he said.
A quarterly dividend of 47.5 cents per share of common stock also was announced recently by the Allete board of directors, the same as other dividends declared this year. On an annual basis, the dividend is equivalent to $1.90 per share. The dividend is payable Dec. 1 to common stockholders of record at the close of business on Nov. 15.