By Ben Fox Rubin
PPL Corp.'s (PPL) first-quarter earnings fell 24% as the public
utility's revenue slumped, though core earnings improved
slightly.
The company lowered its full-year outlook, now predicting $2.15
to $2.40 a share in ongoing earnings, from its February view of
$2.25 to $2.50.
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 $413 million, or 65 cents a share, down
from $541 million, or 93 cents a share, a year earlier. Excluding
some energy-related economic activity and other items, earnings
from ongoing operations rose to 71 cents from 70 cents.
Revenue shrank 40% to $2.46 billion, as unrealized economic
activity in wholesale energy marketing, which includes hedging, was
negative $822 million, compared with positive $852 million the year
before.
Analysts polled by Thomson Reuters most recently projected
ongoing earnings of 70 cents on revenue of $3.37 billion.
Earnings from ongoing operations in the supply
segment--primarily the competitive electricity generation and
energy marketing operations of PPL Energy Supply--fell to 11 cents
a share from 27 cents, due in part to lower Eastern energy margins
due to lower baseload energy prices, the company said.
Ongoing earnings from the company's U.K. regulated operations
rose to 37 cents a share from 31 cents the year before on higher
delivery revenue as a result of higher prices, and lower income
taxes.
The Kentucky regulated segment's earnings were up at 14 cents a
share from six cents due to new electric and gas rates that went
into effect Jan. 1, and higher sales volumes due to weather.
Shares closed Wednesday at $33.26 and were inactive premarket.
The stock is up 16% so far this year.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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