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The Honolulu Advertiser
Posted on: Friday, February 20, 2009

HEI profit plunges 65.8% to end 2008

By Rick Daysog
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Hawaiian Electric Industries Inc. said yesterday that it earned $13.9 million, or 16 cents per share, in the fourth quarter.

ADVERTISER LIBRARY PHOTO | October 2008

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Fourth quarter earnings at Hawaiian Electric Industries Inc. tumbled nearly two-thirds due to sluggish electricity sales and an increase in residential loan delinquencies at its bank subsidiary.

HEI said yesterday that it earned $13.9 million, or 16 cents per share, during the three months ending Dec. 31, down from $40.6 million, or 49 cents per share, in the year-earlier period.

The results, released after the market closed, were below Wall Street's expectations. Analysts polled by Bloomberg News had forecast fourth-quarter earnings of 36 cents per share.

HEI's stock price dropped $1.47 yesterday to close at $17.69 on the New York Stock Exchange.

"(In) the fourth quarter and especially in December, the company felt the impact of a sharp decline in the Hawai'i economy, the depressed national economy and volatility in the financial markets," said HEI's Chief Executive Officer Constance Lau.

"Demand for electricity dropped significantly, residential loan delinquencies started to rise and bank securities were required to be written down to their fair value."

For the year, HEI earned $90.3 million, or $1.07 per share, which was up from 2007's $84.8 million, or $1.03 per share.

Net income at HEI's electric utility was down more than 50 percent to $14 million in the fourth quarter from $28.2 million.

The company said kilowatt hour sales dropped 3.6 percent while operations and maintenance expenses increased by $16.5 million.

American Savings Bank, HEI's bank subsidiary, saw its quarterly income fall 65.6 percent to $5.9 million.

The company said it recorded a $6.3 million provision for loan losses during the latest fourth quarter, which compares with a $1.8 million provision in the year-earlier period. The increase was partly due to a rise in nonperforming residential lot loans.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.