Profit falls nearly 22 percent for Dominion in second quarter

THE TAKE: Dominion reported Tuesday that second quarter profit fell nearly 22 percent as the energy company discontinued operations at two energy power stations and experienced other charges.  In unaudited earnings, the company earned $202 million, or 35 cents per share, for the quarter ending June 30. That compares to $258 million, or 45 cents per share, compared with the same quarter in 2012.

Operating earnings, Dominion’s primary measure of performance, were $355 million, or 62 cents per share, 5 percent more than the $339 million, or 59 cents a share, for the same period in 2012. The increase was attributed to higher revenues related to gas transmission projects and higher rate adjustment clause revenues.

The company said the principal differences between the unaudited and operating earnings are related to a $69 million net loss from discontinued operations at Brayton Point in Massachusetts and the Kincaid Power Station in Illinois, units the company has agreed to sell as part of a plan to reduce its coal-fired generation assets. In addition, Dominion recorded $86 million in charges related to the impairment of certain natural gas infrastructure assets, and other charges.

Dominion expects third-quarter operating earnings in the range of 85 cents per share to 95 cents compared to third-quarter operating earnings of 92 cents per share in 2012.

THE COMPANY’S TAKE:  Thomas F. Farrell II, chairman, president and CEO said in a statement:
“Our second-quarter results came in below the midpoint of our guidance range of 60 cents to 70 cents per share reflecting the impact of lower than expected sales and lower contributions from Producer Services. Despite the challenging quarter, we remain focused on delivering 5 percent to 6 percent earnings per share growth this year.”