PPL Corporation (NYSE: PPL) today (7/24) reported a 12 percent increase in per share earnings in its core businesses for the second quarter of 2001. PPL earned a record $0.72 per share during the second quarter from its core business operations of energy generation, marketing, and distribution and transmission as compared to $0.64 per share a year ago.
Additionally, PPL recorded $0.08 per share in the second quarter related to benefits of tax credits from synfuel operations, for total reported earnings of $0.80 per share. The contributions from synfuels were not previously included in the company’s published forecasts. PPL recorded the benefits in the second quarter following an evaluation of the recent Internal Revenue Service revenue procedures as they apply to the company’s synfuel projects.
"We experienced solid results in the second quarter," said William F. Hecht, PPL’s chairman, president and chief executive officer. "The major drivers of our second-quarter earnings were increased margins on unregulated wholesale energy transactions conducted by our energy marketing and trading units, positive results from our regulated energy delivery business in Pennsylvania and favorable results from our portfolio of international investments."
Hecht said PPL’s second-quarter earnings rose solidly above a year ago, even when compared to last year’s second quarter, which included a $0.17 per share benefit from the sale of emission allowances in last year’s second quarter, a sale that was not repeated in this year’s second quarter.
Hecht reiterated PPL’s prior forecast of earnings in excess of $4.00 per share for 2001. The 2001 forecast reflects a strategic initiative the company terms "securitization" of PPL Electric Utilities, the regulated electricity delivery subsidiary. All necessary approvals for this initiative have been received, including those of PPL Electric Utilities’ shareowners, the Pennsylvania Public Utility Commission and the Federal Energy Regulatory Commission.
Later this summer, PPL anticipates completing this strategic initiative, which will enable PPL to lock in a market for a significant portion of its eastern generation through 2009 at very favorable prices.
PPL’s earnings per diluted share for the first half of 2001 were $2.31, a 42 percent increase over the earnings of $1.63 per diluted share for the same period of 2000. This strong growth in earnings resulted primarily from improved margins in wholesale energy operations and increased contributions from international activities. In addition, the company’s sales of energy delivered to residential and small business customers reflected above-average growth for both the quarter and for the year to date.
Consolidated Financial Information (unaudited)
Certain statements contained in this news release, including statements with respect to future earnings, energy prices, supply, sales, margins and deliveries, financing costs, taxes, strategic initiatives, subsidiary performance, growth, project development, and generating capacity, 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; development of new projects, markets and technologies; performance of new ventures; political, regulatory or economic conditions in countries where PPL Corp. or its subsidiaries conduct business; receipt of necessary governmental approvals; capital market conditions; stock price performance; 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.