ALLETE Reports Third Quarter EarningsOf 47 Cents Per Share
ALLETE Reports Third Quarter Earnings Of 47 Cents Per Share
ALLETE, Inc. (NYSE: ALE) today reported third quarter 2001 earnings of 47 cents per share versus 50 cents last year. Net income was $37.8 million on quarterly revenue of $420.2 million, compared with net income of $35.0 million and $323.5 million of revenue for the same period a year ago."We are very pleased with our third quarter results, considering the current national situation," said David Gartzke, ALLETE president. "Energy Services and our real estate business posted strong earnings. However, the Sept. 11 terrorist attacks did have a negative impact on our financial performance this quarter, particularly at Automotive Services and our securities portfolio."
Energy Services net income rose 51 percent over the same period a year ago, boosted by stronger trading margins than in 2000 with its cooler-than-normal summer. Expenses related to a scheduled outage at the Square Butte plant were recorded during the quarter. The outage has been extended into October, which is later than originally planned.
Automotive Services quarterly net income rose 31 percent compared to last year, even though overall auction activity slowed significantly in the weeks following the Sept. 11 terrorist attacks. Dealer attendance, the number of vehicles brought to auction and the percentage of vehicles sold all dropped suddenly during the last half of September. Automotive Services estimates that the decreased activity reduced its net income by $3.5 million for the quarter. Despite this, same-store growth at ADESA locations rose 13 percent for the quarter, as measured by earnings before interest, taxes, depreciation, amortization and lease expense.
At Automotive Finance Corporation, the number of vehicles financed increased 13 percent and the accounts receivable portfolio climbed 8 percent to $425 million. Automotive Services remains on track to achieve 40 percent earnings growth for 2001.
Water Services net income for the quarter was flat compared to a year ago. A 6 percent decrease in water sales due to wet weather was offset by a gain on asset sales in Florida resulting from the condemnation of a small water system. The total number of water customers increased 4 percent compared to third quarter 2000.
Economic fallout from the Sept. 11 attacks also affected earnings from ALLETE's Investments segment. Real estate sales were strong, but turbulence in the financial markets resulted in a short-term decline in ALLETE's securities portfolio, which has since recovered.
"As a result of the Sept. 11 attacks, the Square Butte outage extension and other factors, ALLETE is revising its earnings per share growth projection to between 6 and 8 percent for 2001 over 2000," Gartzke said.
ALLETE's corporate headquarters are in Duluth, Minn. ALLETE's holdings include the second largest wholesale automobile auction network in North America; the leading provider of independent auto dealer inventory financing; the largest investor-owned water utilities in Florida and North Carolina; significant real estate holdings in Florida; and a low-cost electric utility that serves some of the largest industrial customers in the United States. For more information about ALLETE, visit the company'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.
