PPL PPL Corporation

By Austen Hufford 

PPL Corp. reaffirmed its earnings guidance but warned that a long-term decline in the British pound could require the utility company to "reassess" its profit growth rate in response to Britain's surprise vote to leave the European Union.

The Allentown, Pa.-based PPL has substantial operations in the U.K., serving almost eight million customers through its four utilities there. In its most recent quarter, more than 60% of PPL's earnings were tied to its U.K. operations.

Shares of PPL fell 4.2% to $37.78 in premarket trading, amid a broader market selloff.

PPL said the Brexit decision wasn't expected to significantly affect its U.K. operations, thanks in part to the company's hedging. The company said it had largely protected itself from fluctuations in the pound through 2017, being 93% hedged for the remainder of this year, 89% hedged for 2017 and 41% hedged for 2018.

Like many companies with operations across countries, currency fluctuations can disrupt results. The British pound took the referendum especially hard, falling by nearly 8% in recent Friday trading.

In a statement, PPL said a "long-term" reduction in the relative value of the pound compared with the dollar would cause the company to "reassess our earnings growth rate."

The company also said the final impact of the referendum was uncertain as potential currency fluctuations could be offset by increases to the U.K. inflation and interest rates.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

June 24, 2016 08:53 ET (12:53 GMT)

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