FirstEnergy 3Q earnings slide on economy, weather

FirstEnergy 3rd-quarter profit falls by half because of bad economy, mild weather

• On 11:36 am EDT, Tuesday October 27, 2009

AKRON, Ohio (AP) -- Power company FirstEnergy said Tuesday its earnings were halved in the third quarter as a weak economy coupled with a mild summer hurt demand for electricity.

FirstEnergy earned $230 million, or 77 cents per share, compared with profit of $471 million, or $1.54 per share, in the year ago quarter. Revenue fell to $3.4 billion from $3.9 billion.

Excluding special items such as a charge associated with the early retirement of $1.2 billion of debt, FirstEnergy earned $1.11 per share in the latest quarter.

Analysts surveyed by Thomson Reuters expected earnings of $1.05 per share on revenue of $2.96 billion.

Like other utilities, FirstEnergy has been hurt by slumping demand for electricity during the recession, particularly among industrial customers. FirstEnergy said industrial sales fell 16 percent during the quarter, primarily because of lower consumption by steel and automotive customers.

Commercial deliveries were down 6 percent and residential deliveries were down 8 percent as weather was unseasonably cool.

To make up for declining consumption, utilities have been slashing expenses. FirstEnergy said total expenses for the quarter were down $137 million to $2.9 billion as the company has worked to cut labor costs and use fewer contractors. The company also benefited from higher rates in Ohio.

FirstEnergy narrowed its 2009 earnings forecast to $3.70 to $3.80 per share from a prior projection of $3.70 to $3.85 per share. Analysts predict profit of $3.75 per share, excluding items.

FirstEnergy's seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, with 4.5 million customers in Ohio, Pennsylvania and New Jersey.

Its shares slipped 55 cents to $44.44 in morning trading.

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