ALLETE, Inc. (NYSE: ALE) today reported 2008 earnings of $2.82 per share, compared with 2007 earnings of $3.08. Net income for 2008 was $82.5 million on operating revenue of $801 million, versus 2007 net income of $87.6 million and operating revenue of $841.7 million.
"ALLETE achieved 2008 earnings within the guidance range we projected at the end of 2007," said Don Shippar, ALLETE's Chairman, President and Chief Executive Officer. "We're pleased to have met our financial expectations despite the difficult economic environment."
The Regulated Operations segment recorded net income of $67.9 million during the year. The company received additional revenue from a wholesale electric rate increase and from interim retail rates now under review by the Minnesota Public Utilities Commission. ALLETE also recorded higher income from its investment in the American Transmission Company due to a higher investment balance.
Electric sales to other power suppliers declined in 2008 due to the expiration of two sales contracts. The company also incurred higher operations and maintenance expense, depreciation, and interest expense during the year.
The Investments and Other segment recorded net income of $14.6 million in 2008 as harsh real estate market conditions in Florida persisted throughout the year. ALLETE recorded a gain on the sale of securities in the first quarter and a tax benefit in the third quarter of 2008.
In the fourth quarter of 2008, ALLETE earned 78 cents per share - one cent more than the corresponding period in 2007. Net income was $23.5 million on operating revenue of $196.1 million in 2008. ALLETE recorded net income of $22.2 million on operating revenue of $212.3 million during the fourth quarter of 2007.
"The current economic climate presents a challenge to us and to our customers," Shippar said. The company will respond to the current economic downturn by managing costs and capital expenditures and by remarketing available power, he said.
Although the company expects little, if any, earnings from its ALLETE Properties investments in 2009, Shippar said he anticipated increased income from its investment in ATC. The company expects to meet the 2009 guidance ALLETE issued on December 5, 2008 - earnings of between $2.10 and $2.35 per share, from net income ranging from $67 million to $75 million.
ALLETE's corporate headquarters are located in Duluth, Minnesota. ALLETE provides energy services in the upper Midwest and has 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.