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Posted on Tue, Aug. 05, 2003
FirstEnergy reports loss, restated earnings, lower guidance
Associated Press

FirstEnergy Corp. on Tuesday reported a loss in the second quarter because of discontinued operations and unusual charges and said it is restating past earnings.

The electric utilities holding company also reduced its 2003 earnings guidance.

In the second quarter, FirstEnergy lost $57.9 million, or 20 cents per share, compared with expected second quarter 2002 restated net income of $216 million, or 73 cents per share.

FirstEnergy's earnings were affected by $63 million in costs associated with the repair of its idled Davis-Besse nuclear power plant.

The plant along western Lake Erie has been shut down since February 2002, when it was closed for maintenance. A month later a leak was discovered that had allowed boric acid to eat nearly through the 6-inch-thick steel cap covering the plant's reactor vessel.

Excluding unusual charges, second quarter earnings were $152.1 million, or 52 cents per share. The Thomson First Call estimate of surveyed brokers was 51 cents per share.

First Energy revenue totaled about $2.9 billion, the same as in the year-ago period.

The company issued a letter to brokers Tuesday advising that its 2002 financial statements will be restated and that investors are cautioned not to rely on the previously issued 2002 statements, or the results previously reported for the first quarter of 2003.

FirstEnergy on Tuesday updated its 2003 earnings guidance previously estimated at $3.35 to $3.55 per share. The company's estimate is now in the range of $2.68 to $2.88 per share. The revised guidance continues to exclude expenses associated with the extended outage at Davis-Besse and unusual charges. Including these items, FirstEnergy's revised 2003 guidance is $1.96 to $2.16 per share.

Unusual items affecting 2003 second quarter results included a charge of $158.5 million, or 32 cents per share, based on the New Jersey Board of Public Utilities' decision on Jersey Central Power & Light's rate proceeding. That ruling reduced the amount of deferred energy and other costs that JCP&L can recover.


FirstEnergy: http://www.firstenergycorp.com/

Nuclear Regulatory Commission: http://www.nrc.gov/

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