UtiliCorp's First-Quarter Earnings Per Share Rise 17 Percent, Buoyed by 278% Increase in EBIT From Aquila's Energy Merchant Business
KANSAS CITY, Mo.--(BUSINESS WIRE)--May 1, 2001--UtiliCorp United (NYSE:UCU - news) today announced that for the 2001 first quarter, earnings available for common shares were $73.5 million, primarily reflecting strong results in its energy merchant business and strong year-to-year results from international network operations.
Earnings available for common shares a year earlier were $54.4 million. Earnings per fully diluted common share were $.69 in this year's quarter, up 17 percent from $.59 in the 2000 quarter.
First-quarter sales were $12.0 billion, up 161 percent from $4.6 billion a year earlier. Sales for the 12 months ended March 31, 2001, were $36.3 billion, up 87 percent from $19.4 billion in the prior 12 months.
``Our energy merchant business, Aquila, Inc., is continuing the strong performance we saw in the latter part of 2000,'' said Richard C. Green, Jr., UtiliCorp chairman and chief executive officer. ``Aquila's record first-quarter results were driven by a 308 percent increase in its wholesale services business and a 223 percent increase in earnings before interest and taxes of the capacity services business.''
Green said UtiliCorp's domestic and international network businesses continued to help fuel the company's growth in earnings before interest and taxes (EBIT), increasing their first-quarter contribution by $10.4 million, after adjustment for deconsolidation of New Zealand investments in June 2000.
EBIT for the 2001 quarter was $191.5 million, up 45 percent from $132.1 million a year earlier.
UtiliCorp's average diluted common shares outstanding in the 2001 first quarter were approximately 106.9 million, up from 92.9 million in the year-ago period. Common shares outstanding increased from the prior year as the result of issuing 6.6 million shares for the St. Joseph Light & Power transaction at the end of 2000 and the secondary offering of 11.5 million shares in early March 2001.
The initial public offering of 17,500,000 Class A Aquila common shares closed on April 27 and an additional 2,475,000 shares were sold pursuant to an overallotment option granted to the underwriters that also closed on April 27. The sale price of $24.00 was above the $21.00 to $23.00 range originally proposed, and raised approximately $450 million in net proceeds for UtiliCorp and Aquila. UtiliCorp now owns approximately 80 percent of Aquila's outstanding shares.
``The success of Aquila's IPO was an important milestone for us,'' said Robert K. Green, president and chief operating officer of UtiliCorp and chairman of Aquila. ``The result was a strong statement of the market's confidence in the ability of UtiliCorp and Aquila to execute our strategy and provide shareholders with outstanding returns.''
The following discussion of UtiliCorp's results by business segment is based on EBIT:
Energy Merchant
The energy merchant business had a record performance for the first quarter. EBIT reached $89.5 million, a 278 percent increase over the 2000 first quarter. Factors behind the increase include excellent performance in marketing and trading core commodity products such as gas, power and carbon. Additionally, continued high demand for term structured products contributed to earnings growth, increasing 59 percent in 2001 compared to 2000. Results from the generation properties acquired from GPU International in December 2000 were better than expected, and the mid-stream gas business benefited from stronger seasonal natural gas demand. Since Aquila's exposure to California remains minimal and fully reserved, the company does not expect that state's energy crisis to have a negative impact on future results.
Networks
United States -- UtiliCorp's U.S. networks had EBIT of $73.5 million in the first quarter of 2001 compared to $71.4 million a year earlier. The initial contribution from the St. Joseph Light & Power division, acquired at the end of 2000, growth in customers and the positive effect of colder than normal weather were partially offset by the impact of inflation and other matters on operating costs.
International -- After adjustment for the June 2000 deconsolidation of New Zealand investments, EBIT from international networks increased $8.3 million or 30 percent compared to the 2000 first quarter. The primary driver fueling this growth was UtiliCorp's purchase of Alberta electric distribution operations in August 2000. Currency weakness in Australia and New Zealand partially offset this increase.
In April 2001, UtiliCorp agreed to sell its generation assets in British Columbia, Canada, for net proceeds of $77 million. The transaction requires regulatory approval, expected to be received this summer.
Services
First quarter EBIT from UtiliCorp's Services segment decreased $6.7 million in 2001 compared to 2000. The segment includes UtiliCorp's 36 percent equity interest in Quanta Services, Inc., one of the largest specialized contractors serving utilities, telecommunications and cable television operators, and government. The EBIT contribution from Quanta is based on Quanta's most recent public guidance regarding its earnings. This increased contribution was more than offset by UtiliCorp's start-up costs associated with its build-out of the broadband business in two Kansas City suburbs and the discontinuation of the management fee formerly being paid to UtiliCorp by Quanta. UtiliCorp expects the gross margin related to the telecom build-out to improve over the remainder of the year as new customers are added to the network.
Based in Kansas City, UtiliCorp United is an international electric and gas company with energy customers and operations across the U.S. and in Canada, the United Kingdom, New Zealand, and Australia. Its 80 percent-owned Aquila, Inc. subsidiary (NYSE:ILA - news) is ranked among the largest wholesalers of electricity and natural gas in North America. Aquila also provides wholesale energy services in the U.K. and has a presence in Scandinavia, Germany, Spain and Bermuda. At March 31, 2001, UtiliCorp had total assets of $13.3 billion and 12-month sales of $36.3 billion. Additional information is available at www.utilicorp.com and www.aquila.com. |
