Higher electricity sales helped propel FirstEnergy Corp.'s
first-quarter income to $241 million, or 82 cents a share, compared
with $116.5 million, or 40 cents a share, a year earlier, the Akron
utility reported Wednesday.
An accounting change was also a major contributor to the strong
quarterly results, company executives said. Not including the
accounting change,FirstEnergy had first-quarter net income of $138.8
million, or 47 cents a share.
The company reported revenue of $3.2 billion, up 10.3 percent
from $2.9 billion in the first quarter of 2002. Electricity sales
increased by 31 percent over the year-earlier period, the company
Shares in FirstEnergy fell 7 cents Wednesday to $33.73.
The closed Davis-Besse nuclear power plant continued to hurt the
company's finances, costing FirstEnergy $88 million, or 18 cents a
share, in the quarter. FirstEnergy had to spend $52 million to buy
replacement electricity, and $36 million on repairs and operating
Company officials said the power plant probably will not be ready
to restart until July, after the completion of repairs and tests.
The 883-megawatt Oak Harbor facility was shut down after severe
corrosion was found on top of the reactor in March 2002. The Nuclear
Regulatory Commission has final say on when the power plant can
The company expects to pay $15 million a month in April, May and
June to buy replacement power while Davis-Besse remains shut down,
and as much as $25 million a month in July and August, said Gary
Leidich, executive vice president ofFirstEnergy's nuclear operating
Paul Ridzon, an analyst with McDonald Investments in Cleveland
who follows First-Energy, said he found no surprises in the
utility's earnings report and a conference call with analysts. The
lack of significant movement in the company's stock price Wednesday
seems to indicate that investors are not surprised to see the
Davis-Besse restart date pushed back, Ridzon said.
Also in the first quarter,FirstEnergy announced it divested its
ownership in the Argentine distribution company Emdersa and will
take a one-time noncash charge of $63 million in the second quarter
Standard & Poor's reaffirmed its credit rating for
FirstEnergy, while upgrading its ``business position'' rating in the
quarter, the company announced.
Also, FirstEnergy expects ``long term'' ownership of four Lake
Erie-shoreline, coal-fired plants that it had been trying to sell,
Senior Vice President and Chief Financial Officer Richard Marsh said
in the conference call. FirstEnergy has not found qualified buyers
for the plants after an earlier sales agreement fell through. The
plants are being used in a way that helps First-Energy's largest
baseload plants run more efficiently, Marsh said.