Pacific Lighting Gets Big Boost From Gas Unit

Pacific Lighting, parent of Southern California Gas, reported a fivefold leap in net income to $53.8 million for the third quarter, but saw earnings drop in all of its businesses except the gas company.

The big year-to-year gain reflects a one-time charge of $60 million in the 1985 period for the writeoff of Pacific Lighting’s interest in a coal gasification project.

Without that writeoff and this year’s $10.6-million extraordinary cost for its acquisition of Thrifty Corp., Pacific Lighting would have recorded an earnings decline of about 8% to $64.4 million for the three months ended Sept. 30.

The gas utility and its oil and gas exploration and production unit were both hit by this year’s decline in the price of crude oil. The utility has lost customers and had to slash its rates to compete with oil, while the exploration unit is receiving lower prices for its product.

Despite lower revenue, the gas utility saw earnings increase 5.5% to $43.7 million. Pacific Lighting said that was made possible by the state Public Utility Commission’s granting of a $95-million revenue increase so that the utility could earn its authorized rate of return.

The gas company has now asked for a $277-million increase in residential rates to offset the business and revenue it has lost from industrial customers switching to burn cheaper oil.

Pacific Lighting’s oil and gas exploration and production business saw earnings plunge 78% to $1.5 million. Pacific Lighting’s latest acquisition, the Thrifty drugstore chain, added to the bottom line, but earnings for the unit slipped to $7.8 million from $8.1 million.

The company’s land development business also saw earnings slip, though Chairman Paul A. Miller said the comparison suffered due to the sale of an office building in the year-earlier period.

For the year to date, Pacific Lighting earned $47.5 million, compared to last year’s $126 million. The big drop is due mainly to a $118-million writedown of oil and gas properties in the first quarter, reflecting world crude oil prices.

Miller said that excluding the various extraordinary charges, earnings for the first nine months climbed 28% on a per-share basis to $2.81.