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The Honolulu Advertiser
Posted on: Tuesday, August 7, 2007

Hawaiian Electric earnings fall 35.5%

Advertiser Staff

Earnings at Hawaiian Electric Industries Inc. declined by 35.5 percent during the second quarter 2007 to $17.5 million due to rising costs at the company's utility and higher interest rates, which cut into American Savings Bank's profit.

THE NUMBERS

Revenue: $600.8 million, down 0.7 percent from year ago.

Net income: $17.5 million, down 35.5 percent from year ago.

Earnings per share: 89 cents, down 46.4 percent from year ago.

Year-to-date revenues: $1.2 billion, down 2.1 percent from a year ago.

Year-to-date income: $24.3 million, down 59.6 percent from a year ago.

Year-to-date earnings per share: 30 cents, down 58.2 percent from a year ago.

REASONS

  • Earnings at HEI's Hawaiian Electric Co. subsidiary fell 38.2 percent due to higher operating and maintenance costs.

  • The utilities' kilowatt sales were up 1.7 percent from second quarter 2006 primarily due to the warmer weather.

  • HEI's bank subsidiary saw its net income fall 22.2 percent due largely to higher interest rates.

  • American Savings' noninterest expenses increased by $6.1 million, or 14.8 percent.

    WHAT THEY ARE SAYING

    "Our utility continued to experience rising costs of operating its systems reliably, while at the bank, the impact of persistently high short-term interest rates on costing liabilities continued to compress net interest margin ... "

    Constance Lau
    President, CEO


    WHAT'S NEXT

    In May, the state Public Utilities Commission approved HECO's request to build a 110-megawatt biofueled plant on O'ahu. The plant should increase generating capacity and improve reliability.

    Analysts polled by Bloomberg News Service expect the company to earn 41.5 cents per share in third quarter 2007.

    Shares are expected to trade between $24 and $27, analysts said.