ALLENTOWN, Pa.---PP&L Resources Inc. on Friday (10/13) outlined a business strategy that has positioned the company to succeed in a competitive marketplace, improve financial performance and increase shareowner value.

"We've enhanced our marketing activities to improve sales growth, we're reducing capital expenditures significantly and we are cutting our operating costs," said William F. Hecht, chairman, president and chief executive officer.

"These initiatives are producing financial performance that is increasing shareowner value, including growth in earnings per share and in the common stock dividend over the long term," Hecht said.

The business strategy outlined by Hecht at a meeting of security analysts in New York includes the following over the next five years:

• A $671 million reduction in capital expenditures, including a decision not to install scrubbers at the Montour power plant.
• Except for common equity capital to be issued in 1996 and 1997 through the dividend reinvestment plan, the company expects to meet all construction expenditures and debt maturities through internally generated funds.
• An 8 percent ($56 million) reduction in operation and maintenance costs by the year 2000.
• At least 2 percent annual growth in service-area sales due to enhanced marketing and economic development activities.
• Additional income growth from activities outside the core utility business.

Hecht said the rate increase granted by the Pennsylvania Public Utility Commission in September also is having a positive effect on the financial outlook for PP&L Resources. It is the company's first base rate increase in 10 years. Even with the increase, the average price customers pay for electricity has risen by only 1.6 percent in the past decade, Hecht said.

"We remain committed to keeping prices as stable as possible and maintaining customer rates that compare favorably with neighboring utilities," Hecht said. He noted that a $22 million credit to customers resulting from bulk power sales is reflected in the rate order to produce a net rate increase of $85 million. Also, the rates approved by the commission include a $90 million decrease in customer base rates beginning in 1999.

PP&L Resources on Friday (10/13) also reported strong earnings performance for the third quarter. Earnings, which were favorably affected by 11 cents per share due to the net effect of a series of one-time charges and credits due principally to the recent rate case decision, were 55 cents per share in the third quarter of 1995, up 19.6 percent from the 46 cents per share earned in the same period the year before. Similarly, earnings for the nine months ended Sept. 30, 1995, were $1.48 versus $1.46 for the same period in 1994. Weather-adjusted sales to service-area customers increased 2.9 percent during the third quarter of 1995.

"Now that the rate case and the costs of our major restructuring efforts are behind us, our strategy has begun to pay off," Hecht said. "With the business strategy I've outlined today, we are well-positioned to succeed in a competitive environment."

The company also reported earnings of $1.44 per share in the 12 months ended Sept. 30, 1995, compared with $1.94 per share earned in the comparable period the year before. When one-time charges and the effects of weather are removed, earnings for the 12 months ended in September 1995 were $1.86, compared with earnings of $2.06 in the year-earlier period.

Earnings during the 12 months ended Sept. 30, 1995 were diluted by the net effect of a series of one-time charges and credits related to the rate case, employment reductions and the previously announced write-down of coal reserves. A warmer-than-normal winter also contributed to lower earnings.

"Our 12-month earnings also reflect the higher costs that caused us to file the rate case, but do not yet reflect the benefits of the recent rate decision," said Hecht.

PP&L Resources Inc., based in Allentown, Pa., is the parent company of Pennsylvania Power & Light Co., Power Markets Development Co. and Spectrum Energy Services Corp. Pennsylvania Power & Light supplies electricity to a 10,000-square-mile area of 29 counties in Central Eastern Pennsylvania. Among the communities it serves are Allentown, Bethlehem, Harrisburg, Hazleton, Lancaster, Scranton, Wilkes-Barre and Williamsport.