FPL Group Inc., Florida’s largest utility owner, said third-quarter profit rose 55 percent after gains in wind and nuclear power sales made up for the cost of its abandoned $12.4 billion bid for Constellation Energy Group Inc.
Net income rose to $524 million, or $1.32 a share, from $339 million, or 87 cents, a year earlier, the company, based in Juno Beach, Fla., said in a statement today. Revenue increased 34 percent to $4.69 billion.
FPL Group, whose Florida Power & Light utility is the state’s largest, has expanded by purchasing nuclear plants and building wind farms. The third-quarter results included $7 million in costs for the failed effort to buy Baltimore-based Constellation, a power supplier and utility owner. FPL Group on Oct. 25 said it was abandoning the effort because of a “protracted and open-ended merger review” in Maryland.
“It looks like a very strong quarter,” said Barry Abramson, who helps manage about $28 billion at Gamco Investors in Rye, N.Y., including about 800,000 FPL shares. “They’re just growing that wind portfolio.”
Excluding the merger costs and a gain of $74 million for the increased value of derivatives contracts used to lock in margins for power generation, profit was $1.15 a share. The company was expected to earn $1.06 a share, the average estimate from 12 analysts surveyed by Thomson Financial.
Shares of FPL rose 85 cents, or 1.7 percent, to $50.77 in New York Stock Exchange composite trading. The stock, which has nine buy recommendations from analysts and five holds, has risen 22 percent this year.
Net income from power generation soared almost fivefold to $215 million from $44 million in the third quarter of 2005, FPL said. Profit at Florida Power rose 5.5 percent to $328 million. The utility delivers electricity to about 4.4 million homes and businesses in the state.
Each quarter, FPL adjusts the value of futures contracts and other derivatives used to lock in margins for power generation to reflect current market prices for power-plant fuel and electricity. Such hedging reduced net income by $56 million in the third quarter of 2005.
The company expects to record a pretax gain of about $90 million in the current quarter related to a previously announced arbitration award over a canceled geothermal project in Indonesia, Steve Stengel, a spokesman for FPL, said in an interview. FPL is one of the owners of utility Karaha Bodas Co., which was involved in the project.
By Bloomberg News Services
URL to article: https://www.wind-watch.org/news/2006/10/31/fpl-profit-rises-55-percent/