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UTILICORP ANTICIPATES SECOND QUARTER LOSS DUE TO ONE-TIME CHARGE; PROJECTS FULL YEAR OUTLOOK; DIVIDEND RATE RECOMMENDED

UTILICORP ANTICIPATES SECOND QUARTER LOSS DUE TO ONE-TIME CHARGE; PROJECTS
    FULL YEAR OUTLOOK; DIVIDEND RATE RECOMMENDED
    KANSAS CITY, Mo., June 15 /PRNewswire/ -- UtiliCorp United (NYSE: UCU) announced today that it expects a net loss of $5.2 million for the second quarter primarily due to a one-time charge against earnings of approximately $11.6 million, or $7.4 million after taxes. The charge, taken as a result of an apparent misappropriation of funds at its Aquila Energy Resources subsidiary, will reduce second quarter primary earnings per average common share by $.21.
    The charge is related to separately announced investigations into apparent improper payments by Aquila related to certain transactions to acquire natural gas and oil properties.  Aquila Energy Resources is a wholly owned subsidiary of Aquila Energy Corp., which is a wholly owned subsidiary of UtiliCorp.
    In addition to the earnings charge, Aquila Energy has been impacted by significant margin reductions related to contractual obligations to sell natural gas at fixed prices during a period in which prices are rising.
    Unseasonably mild weather throughout much of the company's utility service area also impacted financial results.  The second quarter typically is UtiliCorp's weakest performing quarter due to the seasonal nature of the utility business.
    Although improved results are expected in the third and fourth quarters, UtiliCorp's net income and earnings per share during those periods are expected to be lower than results in the same periods of 1991.  At this point in time, financial results in 1992 are expected to be substantially below those of 1991 and below the annualized common dividend rate of $1.60 per share.  The uncertainty of natural gas markets and weather patterns are contributing factors.
    UtiliCorp management will recommend to the company's board of directors that the current dividend rate on common stock remain unchanged.
    "We anticipate a sharp turnaround in our financial performance by the first quarter of 1993," said UtiliCorp Chairman and President Richard C. Green, Jr.  "We also anticipate approval of certain rate increases by late 1992 which are pending in our utility service areas."
    Green emphasized that current estimates indicate that all of the company's regulated utility operations, its UtilCo Group subsidiary and Aquila-Clajon unit currently are expected to achieve profit expectations for the year.
    "Our growth strategy is fundamentally sound," Green said.  "The strategy has created a great deal of additional value for shareholders since it was launched in 1985 and we remain committed to it."
    For the three-month period ending June 30, 1992, UtiliCorp expects a primary loss per average common share of $.20 on a net loss of $5.2 million, versus earnings per average common share of $.15 on net income of $6.3 million in the 1991 second quarter.  The company expects revenues of $253.5 million in the second quarter, compared with revenue of $189.4 million in the prior year's period.
    For the first six months of this year, UtiliCorp expects primary earnings per common share of $.57 on net income of $23.5 million, versus earnings per share of $1.10 on net income of $34.9 million in the first six months of 1991.  Revenues for this year's six-month period are expected to be $619.5 million, compared with revenues of $506.0 million in last year's period.
    Average common shares outstanding increased from 28.4 million in the 1991 second quarter to 34.9 million in the current period.  The increase is primarily due to a public offering of approximately five million new shares late in 1991.
    Aquila's Texas-based Aquila-Clajon unit continues to benefit from stable prices for natural gas liquids and from a rising number of gas well connections to its intrastate gas gathering system.  The Aquila- Clajon unit was acquired in a two-part transaction totaling approximately $89 million.  Aquila initially acquired a 49 percent ownership stake in the gas system in July 1990 and became sole owner in September 1991.
    "We remain committed to Aquila Energy," Green said.  "Aquila has been fundamental to our strategy of building our core energy and utility business."
    UtiliCorp also announced that second quarter results were impacted by an $800,000 after tax charge against earnings taken at its Michigan Gas Utilities division.  The charge is related to an order by the Michigan Public Service Commission to refund $3.2 million to customers to compensate for collection of certain gas costs during 1990.
    Green noted that financial performance during the remainder of the year should be helped by the first full year of contributions from UtiliCorp's newly acquired WestPlains Energy division in addition to the expected rate increases during the last half of this year.
    UtiliCorp presently has rate increase requests pending in six regulatory jurisdictions that would increase annual revenues by $27.7 million.  The increases are needed primarily to offset the cost of extensive system improvements.
    UtiliCorp remains committed to an aggressive program of maintaining and improving its facilities and equipment.  The company expects to spend approximately $160 million in 1991.
    Based in Kansas City, UtiliCorp provides gas and electric service to nearly a million customers in eight states and the province of British Columbia.
    -0-             06/15/92
    CONTACT:  Ed Muncaster or Phil Hermanson, 816-421-6600, both of UtiliCorp
    (UCU) CO:  UTILICORP UNITED IN:  UTI SU:  ERN ST:  MO -- MN004 -- X511  06/15/92
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Publication:PR Newswire
Date:Jun 15, 1992
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