ALLENTOWN, Pa.---PP&L Resources, Inc. (NYSE: PPL) Wednesday (10/27) reported third quarter earnings of $1.72 per share for the first nine months of 1999, excluding extraordinary items and one-time adjustments. This improved performance reflects an increase of 25 cents per share or 17 percent from the same period of last year, also excluding extraordinary items and one-time adjustments.

"We are pleased to show continued growth in earnings through three quarters of 1999," said John R. Biggar, PP&L Resources' senior vice president and chief financial officer.

Biggar said the year-to-date earnings performance reflects increased use by PP&L, Inc.'s 1.3 million electric delivery customers in central and eastern Pennsylvania and increased earnings from PP&L Global, the company's international unregulated energy development subsidiary. He also cited benefits from lower depreciation on generation assets in connection with the transition from a regulated to a competitive energy market and fewer shares of common stock outstanding as a result of stock repurchase programs. Other factors contributing to the earnings improvement included the company's Penn Fuel Gas subsidiary and higher margins on wholesale energy marketing and trading activities.

These benefits were partially offset during the first nine months of 1999 by a 4 percent rate reduction for electric delivery customers in Pennsylvania and the loss of customers who shopped for alternate electricity generation suppliers under the state's customer choice program.

"We are achieving success in improving the company's earnings performance with our strategy to grow retail and wholesale energy sales through aggressive marketing, to expand our generation operations in the United States, to provide high-quality energy delivery services at excellent prices and to expand into overseas markets," said Biggar.

Including extraordinary items and one-time adjustments, earnings per share for the nine months ended Sept. 30, 1999 and 1998 were $1.85 and $(3.94), respectively. The 1999 period reflects a one-time benefit of 13 cents per share resulting from a series of transactions related to the securitization of transition costs. The 1998 period includes various one-time items primarily related to the restructuring of the electric industry and the movement to a competitive energy market.

The company reported third quarter earnings of 55 cents per share, slightly higher than the 54 cents per share reported for the same period a year ago. Both earnings figures exclude extraordinary items and other one-time adjustments. Including these items, earnings per share for the third quarters of 1999 and 1998 were 68 cents and 81 cents per share, respectively.

During the third quarter, the company continued to make strides in its plan to develop and acquire power plants in key domestic markets. A subsidiary of PP&L Global is in the process of acquiring interests in 11 hydroelectric facilities, two coal-fired plants and other related assets in the state of Montana.

Overseas, during the third quarter, PP&L Global completed the acquisition of an additional 48 percent interest in Empresas Emel S.A., one of Chile's largest electricity distribution holding companies, giving PP&L Global a total of 85 percent ownership. Since that time, PP&L Global has purchased additional interests in this company toward its goal of increasing its ownership by another 10 percent.

In September 1999, PP&L Global's United Kingdom subsidiary, South Western Electricity plc (SWEB), sold its electricity supply business. Because of a one-month lag in recording the results from international affiliates, PP&L Global expects to record an after-tax gain of about $40 million in the fourth quarter of 1999. In the future, SWEB, now renamed Western Power Distribution (WPD), will focus on its extensive power distribution network in southwest England. The supply business had represented only about 15 percent of SWEB's annual earnings.

The U.K.'s Office of Gas and Electricity Markets (Ofgem) is expected to announce by mid-November final rate reductions for the regional electric companies in the United Kingdom, including WPD. In anticipation of this Ofgem action, PP&L Resources is evaluating the carrying value of its investment in WPD. The amount of any possible write-down cannot be determined until Ofgem issues its final rate reductions for WPD, but such a write-down could be material.

During the third quarter, PP&L Transition Bond Company LLC, a wholly owned subsidiary of PP&L, Inc., successfully issued $2.42 billion in high-rated (AAA) transition bonds through the securitization process, following through on PP&L, Inc.'s restructuring agreement with the Pennsylvania Public Utility Commission a year ago.

The securitization process is expected to increase PP&L Resources' year 2000 earnings by 5 cents per share, to $2.45, from the company's previous forecast of $2.40 per share and to increase 2001 earnings per share by 10 cents, to $2.70, from the previous forecast of $2.60 per share.

PP&L Resources also reported earnings of $2.13 per share for the 12-month period ended Sept. 30, 1999, compared with $1.90 for the same period a year ago, excluding extraordinary and other one-time items, representing a 12 percent increase.