HEI says quarterly earnings down 3%

By Frank Cho
Advertiser Staff Writer

Hawaiian Electric Industries Inc. said first-quarter earnings fell 3 percent because of increased expenses and lower electricity sales at its electric subsidiary.

Hawai'i's largest power utility company said net income for the three months ended March 31 dropped to $26.9 million, or 75 cents a share, from $27.7 million, or 84 cents, in the same year-earlier period.

"We had anticipated that the Hawai'i economic downturn post-Sept. 11 would have a negative impact on kilowatt-hour sales. However, first-quarter sales were down mainly because of cooler weather," said Robert Clarke, HEI's chairman, president and chief executive officer.

Electric utility net income during the most recent quarter was $20.4 million, down 4.6 percent from $21.4 million a year ago. The company said operating, maintenance and interest costs were lower during the period as part of a post-Sept. 11 cost-containment effort, but higher depreciation expenses and lower electricity sales more than offset those decreases.

"Our utilities made an extra effort to lower expenses to offset lower sales," Clarke said.

On a per-share basis, the total number of shares outstanding increased by about 2.7 million. That cost investors about 6 cents per share in profits.

The company's American Savings Bank subsidiary was a bright spot in the quarter, earning $13.4 million, up 12.6 percent from $11.9 million a year ago.

The positive performance reflected higher net interest and fee income and an accounting rule change that resulted in a $1 million boost to the bottom line.

Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.