ALLETE reports second quarter earnings and reaffirms 2008 earnings guidance
ALLETE, Inc. (NYSE: ALE) today reported second quarter 2008 earnings of 37 cents per share, which were consistent with the company's expectations. CEO Don Shippar said the company reaffirms its previously stated earnings guidance of a range from $2.70 to $2.90 per share for 2008.
Second quarter 2008 net income was $10.7 million on operating revenue of $189.8 million, compared to $22.6 million of net income and $223.3 of operating revenue in the corresponding period a year ago. Last year's results included two major property sales, resulting in net income of $11.5 million for the company's real estate segment. Real estate income in the second quarter this year was $2.5 million, or about 31 cents per share lower than in 2007.
Earnings in the regulated utility segment were $5.2 million in the second quarter of 2008, compared to $6.1 million a year ago. Depreciation and interest expense were higher year-over-year as the result of a major capital expenditure program underway at Minnesota Power. Operation and maintenance expenses were also higher in 2008, and margins on sales to other power suppliers were lower.
Income from ALLETE's "Other" segment declined $2.7 million in the second quarter compared to 2007 partially due to lower earnings on cash and short-term investments. Also, in the second quarter of 2007, the "Other" segment included a positive tax audit settlement and the release from a loan guarantee.
"We expect to record positive earnings for our real estate business despite a difficult market environment," said Shippar. "Our energy businesses are performing as we expected they would, and increased interim rates at Minnesota Power that go into effect today will begin to offset increased expenses."
Shippar added that growth at Minnesota Power will continue as a result of its significant capital expenditure program and the company will also make additional investments in the American Transmission Company.
ALLETE's corporate headquarters are located in Duluth, Minnesota. ALLETE provides energy services in the upper Midwest and has significant real estate holdings in Florida. More information about the company is available on ALLETE's Web site at www.allete.com.
The statements contained in this release and statements that ALLETE may make orally in connection with this release that are not historical facts, are forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties and investors are directed to the risks discussed in documents filed by ALLETE with the Securities and Exchange Commission.