By Ben Fox Rubin
PPL Corp.'s (PPL) fourth-quarter profit fell 21% as the public
utility's revenue sank and its supply segment weakened.
PPL has been aiming to increase its presence in regulated-power
markets as wholesale generators across the industry have been hurt
by stubbornly low natural-gas prices. As part of that goal, the
company in 2011 closed on deals valued at more than $14 billion to
acquire two Kentucky utilities and an electric-distribution
business in the U.K. Midlands--a move that more than doubled the
number of PPL's regulated utility customers.
PPL reported a profit of $359 million, or 60 cents a share, down
from $454 million, or 78 cents a share, a year earlier. Excluding
some hedging-related activity, write-downs and other items,
earnings from ongoing operations fell to 49 cents from 71
cents.
Revenue slipped 24% to $3.22 billion, as unrealized economic
activity in wholesale energy marketing, which includes hedging, was
$11 million, compared with $1.18 billion the year before.
Analysts polled by Thomson Reuters most recently projected
ongoing earnings of 47 cents on revenue of $2.47 billion.
Earnings from ongoing operations in the supply
segment--primarily the competitive electricity generation and
energy marketing operations of PPL Energy Supply--fell to seven
cents a share from 27 cents, due in part to lower nuclear and
fossil-fuel generation output in the East and higher operation and
maintenance expense.
Ongoing earnings from the company's U.K. regulated operations
rose to 29 cents a share from 28 cents the year before on higher
delivery revenue.
The Kentucky regulated segment's earnings were up at eight cents
a share from six cents primarily due to higher retail margins.
The company also forecast 2013 earnings of $2.25 to $2.50 a
share, compared with estimates of $2.42 from analysts polled by
Thomson Reuters. PPL said it expects lower earnings in 2013
compared with 2012, primarily due to lower energy margins in the
supply segment.
PPL also raised its quarterly dividend to 36.75 cents a share
from 36 cents.
Shares closed Wednesday at $30.47 and were inactive premarket.
The stock is up 8.9% over the past three months.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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