ALLENTOWN, Pa---Resuming right where it left off with 1999's record performance, PPL Corp. (NYSE: PPL) Wednesday (4/26) reported record-high quarterly earnings per share of $0.99 for the three months ended March 31, 2000 -- a 30 percent increase over its first quarter 1999 earnings of $0.76.
Although earnings for the fourth quarter of 1999 were higher at $1.02 per share, that figure was positively impacted by 38 cents in one-time items. There were no one-time items in PPL's earnings for the first quarter of 2000.
PPL's strong first quarter earnings put the company on track to meet its earnings forecast of between $2.60 and $2.65 per share for the year 2000, which would represent an increase of 11 to 13 percent over the results for 1999.
During 1999, PPL Corporation's earnings per share, adjusted for one-time items, rose 26 percent over 1998 to $2.35 -- the highest in the company's 80-year history.
The company's earnings forecast for 2001 is between $2.95 and $3.00 per share, an increase of about 27 percent over 1999. Through the attainment of this 2001 forecast, PPL's earnings per share will have increased by more than 60 percent from adjusted earnings per share of $1.87 in 1998.
"Our integrated growth strategy continues to produce tangible, positive results," said John R. Biggar, senior vice president and chief financial officer for PPL Corp.
"As an early advocate of increased competition, we envisioned the kinds of opportunities on which we are now capitalizing in the rapidly evolving energy marketplace," Biggar added. "The success of our integrated strategy to generate and sell competitively priced energy in key U.S. markets and to operate high-quality energy delivery businesses in selected regions around the world is being validated in our financial results."
Contributing to PPL's first quarter results were a 22 percent increase over a year ago in electricity supplied to retail customers in both regulated and competitive energy markets; a 7 percent increase in wholesale energy sales; and a 3 percent increase in electricity delivered to retail customers in the company's regulated energy markets in central and eastern Pennsylvania.
Biggar said the company's strong first-quarter growth in earnings per share also benefited from the following factors:
- increased margins from energy marketing activities;
- better-than-forecast earnings contributions from PPL's investments in Montana generating facilities and in PPL Gas Utilities;
- success in controlling operating costs;
- the restoration of rates following a one-year, 4 percent rate reduction in 1999 for electric delivery customers; and
- fewer shares of common stock outstanding as a result of stock repurchase programs.
"We are particularly encouraged that our retail electricity and natural gas sales increased in the first quarter despite one of the mildest winters on record," Biggar explained.
The company's PPL EnergyPlus subsidiary currently sells electricity to end-use customers in competitive markets in Pennsylvania, New Jersey, Delaware and Maine. In addition, PPL EnergyPlus is a licensed electricity supplier in Montana and Maryland and has filed for licenses to serve customers in Connecticut and Massachusetts.
To maximize opportunities in key U.S. energy markets, PPL has plans to increase its generating capability to about 20,000 megawatts by the middle of this decade. The company now owns and operates about 9,600 megawatts of generation capacity at power plants in Pennsylvania, Montana and Maine and is developing another 1,050 megawatts at plants in Connecticut, Pennsylvania and Arizona.
Excluding one-time items, earnings per share for the 12-month period ended March 31, 2000, were $2.54. That figure is also a record for a 12-month period at PPL and is up from $2.02 per share of similarly adjusted earnings for the same period last year, an increase of 26 percent.
Reported earnings per share for the 12 months ended March 31, 2000, were $3.04 compared with a loss of $3.38 for the same period in 1999.
The current period reflects one-time boosts to earnings from the sale of a generation plant in Sunbury, Pa.; a gain from the sale of the supply portion of the company's electricity business in the United Kingdom -- SWEB, now renamed Western Power Distribution (WPD); and a net gain from the sale of transition bonds in the securitization process. Partially offsetting these benefits during the period was a one-time adjustment to write down the carrying value of certain investments made by PPL Global, the company's international energy development subsidiary.
The 12-month period ended March 31, 1999, reflects one-time charges related to the transition to a competitive electricity market in Pennsylvania and an income tax rate change affecting the company's investment in the United Kingdom, as well as other one-time adjustments.
Biggar said the improvement in the 12-month-ended adjusted earnings is due primarily to the following factors:
- higher earnings from the company's PPL Global overseas investments;
- lower depreciation on generation assets in connection with the transition from a regulated to a competitive energy market;
- success in controlling operating costs; and
- fewer shares of common stock outstanding as a result of stock repurchase programs.
Certain statements contained in this news release, including statements with respect to future earnings, are "forward-looking statements" within the meaning of the federal securities laws. Although PPL Corp. believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: market demand and prices for energy, capacity and fuel; weather variations affecting customer energy usage; competition in retail and wholesale power markets; the effect of any business or
industry restructuring; the profitability and liquidity of PPL Corp. and its subsidiaries; new accounting requirements or new interpretations or applications of existing requirements; operating performance of plants and other facilities; environmental conditions and requirements; system conditions and operating costs; performance of new ventures; political, regulatory or economic conditions in countries where PPL Corp. or its subsidiaries conduct business; foreign exchange rates; and the commitments and liabilities of PPL Corp. and its subsidiaries. Any such forward-looking statements should be considered in light of such factors and in conjunction with PPL Corp.'s Form 10-K and other reports on file with the Securities and Exchange Commission.