Posted on: Tuesday, April 26, 2005
HEI profits down despite gains at American Savings
Advertiser Staff
First-quarter profits at Hawaiian Electric Industries fell because of higher operations and maintenance costs resulting from increased use of electricity in a growing Hawai'i economy. The decline came despite earnings gains at HEI's American Savings Bank subsidiary.
First quarter 2005
- HEI revenue: $472.6 million, up 8 percent from a year ago
- HEI net income: $24.1 million, down 22 percent from last year
- HEI earnings per share: 30 cents a share, down 25 percent from a year ago
- HECO net income: $12.4 million, down 38 percent from a year ago
- KWH sales: down 1 percent
- American Savings Bank net income: $17.8 million, up 11.5 percent from a year ago
Reasons
- Hawaiian Electric Industries said lower profits at its electric utility subsidiary more than offset earnings gains at its American Savings Bank unit.
- Higher operations and maintenance costs at Hawaiian Electric Co. hurt earnings. Those costs rose by $8 million, which including higher retirement benefit expenses.
- American Savings Bank profits rose because of increases in deposits and loans, good loan quality, and reversal of loan loss reserves.
What they are saying
“First-quarter results were down as we continued to experience increased operations and maintenance costs at our utilities to ensure reliable electric service to our customers.”
— Robert Clarke | Chairman, president and chief executive
What's next
- Overhaul repairs and maintenance will start on Waiau 10, an O'ahu generator used during peak hours, this quarter.
- Interest margins at American Savings Bank could continue to be pressured by a trend of higher interest rates.
- The credit rating of HEI and its units could change after Standard & Poor's last week downgraded its outlook to "negative" from "stable." The debt rating agency said higher costs and no rate increases put pressure on its finances.
