Pepco Profit Drops As Revenues Decline - Update

(RTTNews) - Electric utility Pepco Holdings Inc. (POM), Wednesday reported a decline in second-quarter profit, hurt mainly by lower revenues. While results were positively impacted by investments in utility infrastructure, recent distribution base rate case outcomes have been disappointing, said CEO Joseph Rigby.

Pepco posted second-quarter net income of $42 million or $0.17 per share, compared with $62 million or $0.27 per share last year.

Excluding items, adjusted earnings for the quarter were $53 million or $0.22 per share, compared with $46 million or $0.20 per share in the prior year.

On average, 13 analysts polled by Thomson Reuters expected earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude one-time items.

The increase in adjusted earnings was led by higher electric distribution revenue, due mainly on better rates from increased infrastructure investment, partly offset by lower default electricity supply margins.

Revenues for the second quarter dropped to $1.05 billion from $1.07 billion a year ago.

For fiscal year 2013, Pepco continues to expect earnings of $1.05 to $1.20 per share, while analysts currently expect $1.13 per share.

The company said that in mid-July, the Pepco Maryland distribution base rate case decision provided less than half of the requested revenue increase and denied two of the three grid resiliency charge proposals. The company has appealed the decision and plans to file its next base rate case in Maryland by the year end. The company's stock is trading at $20.53, up $0.26 or 1.23%, on a volume of 0.8 million shares on the NYSE.