ALLETE Reports Second Quarter Results; reaffirms guidance for 2005 earnings growth
For the second quarter 2005, ALLETE, Inc. (NYSE: ALE) today reported a loss of $1.45 per share from continuing operations that included a previously-announced charge of $1.84 per share related to the assignment of the Kendall County, Ill. power purchase agreement.
Excluding the Kendall County charge, ALLETE's earnings from continuing operations were 39 cents per share compared with eight cents per share in the second quarter of 2004. The company's earnings in the second quarter of 2004 were adversely affected by an impairment charge.
"We're pleased that our core energy and real estate businesses continue to perform at a high level," said Donald J. Shippar, CEO of ALLETE. The company reaffirmed its guidance of 45 to 50 percent earnings growth in 2005 from continuing operations, excluding the Kendall transaction and any earnings from investments it may make in growth initiatives.
"Two significant events occurred during the quarter," Shippar said. "First, the Kendall County transaction was a key strategic accomplishment for our company. Second, site preparation began at our Town Center at Palm Coast project, which we expect will contribute substantial earnings over the next few years."
Quarterly net income from continuing operations at the company's Regulated Utility segment climbed five percent to $7.8 million compared to the second quarter of 2004, due to continued strong electricity sales to retail customers and other power suppliers.
Real Estate income from continuing operations was $2.8 million in the second quarter of 2005, compared with $2.1 million in the same period a year ago. During the quarter, ALLETE Properties recorded its first sales from Town Center at Palm Coast, a major development project now taking shape in the fast-growing northeast Florida community.
Results from Nonregulated Energy Operations reflected the Kendall County charge, which was announced by ALLETE in April of this year. The elimination of operating losses incurred at the Kendall County facility was partially offset by increased expenses at the Taconite Harbor generating facility and less income at other Nonregulated Energy Operations businesses.
In ALLETE's Other business segment, the second quarter produced income from continuing operations of $300,000 compared to a loss of $7.2 million a year ago. This quarter the company benefited from lower interest expense due to reduced debt balances and debt refinancing. In the second quarter of 2004, the company recorded a $3.2 million after-tax impairment in its emerging technology investment portfolio.
ALLETE, headquartered in Duluth, Minn., provides energy services in the upper Midwest and has significant real estate holdings in Florida. More information about the company is available 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.