PG&E; Reports $2.19-Billion Quarterly Loss
Growing money troubles at a subsidiary that builds power plants and trades energy led PG&E; Corp. on Thursday to report a $2.19-billion net loss for the fourth quarter.
The loss for the period ended Dec. 31 contrasted sharply with the $529 million earned in the same quarter of 2001. On a per-share basis, PG&E; lost $5.75 in the most recent quarter and earned $1.45 in the year-ago quarter.
The loss reflects continuing problems at PG&E;’s National Energy Group unit, which has been hurt along with many other power-generation and trading companies by low power prices and tight credit. PG&E; Chief Executive Robert Glynn raised the prospect Thursday that the San Francisco-based company might sell or close the troubled division.
NEG posted a $36-million loss in the quarter, compared with earnings of $7 million in the same period of 2001. In addition, NEG was responsible for $2.4 billion in after-tax charges reflecting the decreased value of power plants and equipment that the company is selling, abandoning or giving to lenders as part of its ongoing restructuring.
PG&E;’s other big subsidiary, the Pacific Gas & Electric Co. utility, reported lower earnings -- $204 million compared with $344 million -- largely because of the timing of an annual regulatory rate adjustment and decreased natural-gas transmission revenue.
The utility, which serves Northern and Central California and is operating under Bankruptcy Court protection, said bankruptcy costs totaled $56 million during the quarter.
A trial examining the merits of a reorganization plan proposed by PG&E; and a competing plan by the California Public Utilities Commission was suspended Thursday so that creditors can weigh a PG&E; proposal to shore up its plan with $700 million in stock, which would replace debt. The trial is set to resume April 8.
Glynn said that the utility’s performance was solid but that the future of NEG is cloudy. The company continues to negotiate with NEG creditors to reach a cooperative restructuring, but if that effort fails then NEG “will not continue in any form as part of PG&E; Corp.,” Glynn said during a conference call with analysts and investors.
PG&E;’s stock responded to the earnings news by rising 42 cents to $13.19 on the New York Stock Exchange.
PG&E; Corp.’s operating earnings fell to $184 million, or 48 cents a share, down 47% but still exceeding analyst expectations. Analysts surveyed by Thomson First Call had expected operating earnings of 45 cents a share. In the fourth quarter of 2001, PG&E; Corp. had operating earnings of $345 million, or 95 cents a share.
Fourth-quarter revenue slipped to $2.97 billion from $3.02 billion.
For the year, PG&E; Corp. recorded a net loss of $874 million, or $2.36 a share, on revenue of $12.5 billion. In 2001, PG&E; earned $1.1 billion, or $3.02 a share, on revenue of $12.2 billion.
