ALBUQUERQUE, N.M., April 24, 2002 — PNM Resources Wednesday reported net earnings of $25.0 million, or $0.63 per diluted share, for the quarter ended March 31, 2002, compared to net earnings of $63.6 million, or $1.60 per diluted share, for the first quarter of 2001.
Total operating revenues for the quarter were $314.0 million, compared to $736.5 million for the same period last year.
There were no one-time items or non-recurring gains or losses included in earnings for the first quarter 2002. In the comparable quarter last year, the company recorded non-recurring losses related to the impairment of a technology investment and transaction costs for the terminated Western Resources transaction that reduced earnings by $0.18 cents per share; ongoing earnings for the first quarter 2001 were $1.78 per diluted share.
Lower wholesale power prices compared to the same period last year were primarily responsible for the overall decline in revenues and earnings in the latest quarter. Wholesale revenues averaged $24 per megawatt-hour (MWh) for the quarter, compared to an average of $135 per MWh in the same period in 2001.
“A weak regional economy and mild weather in the Western US reduced prices for power below last year’s levels,” said PNM Resources Chairman, President and Chief Executive Officer Jeff Sterba. “Although we have seen some recovery in the wholesale market from the lows reached at the end of last year, margins and marketing activity are still significantly below the record levels they reached in the first quarter of 2001.”
Forward power prices trended upward through the first quarter, although still substantially below last year. As the region enters the summer period of peak power demand, pricing levels and activity in the wholesale market will depend upon:
* temperatures in the Western states,
* the strength of the economic recovery now underway,
* the availability of generation resources to meet the growing demand for power, and
* regulatory policy.
Wholesale electric volume for the latest quarter was 2.3 million MWh, down 26 percent from the 3.2 million MWh in wholesale sales during the comparable period in 2001.
Fuel and purchased power expense for first quarter 2002 was down 74 percent from the same period last year, primarily due to the reduced wholesale volume. Total non-fuel operations and maintenance expense for the quarter was up 3.1 percent, to $40.6 million, primarily due to increased labor expenses and an increase in costs associated with the Four Corners Generating Station, in which PNM is a part owner.
PNM’s electric and gas utility, which serves 382,000 electric and 444,000 gas customers in New Mexico, reported an 0.7 percent increase in electric revenues for the period, to $135.2 million. Gas revenues, which include the cost of gas passed through to customers, declined 43.1 percent for the quarter, to $109.2 million, primarily as the result of lower natural gas prices during the first quarter of 2002 as compared to the same period in the previous year.
Weather for the quarter in PNM’s New Mexico service territory was relatively unchanged from the previous year. Retail electric sales increased 1.2 percent for the quarter.
Based on first quarter results and management’s forecast of wholesale price trends through the remainder of the year, PNM Resources has revised its 2002 earnings guidance to between $2.60 and $2.85 per diluted share, down from the previous guidance in the range of $3.00.
Factors that could affect results include: prices prevailing in the wholesale power market and the cost of natural gas; the level of trading activity in the market; and relative amount of price movement within the market over the course of the year.
PNM Resources is an energy holding company based in Albuquerque, New Mexico. Its principal subsidiary is Public Service Company of New Mexico, which provides electric power and natural gas utility services to more than 1.3 million people in New Mexico. The company also sells power on the wholesale market in the Western US. PNM Resources stock is traded primarily on the NYSE under the symbol PNM.