Dominion Resources Announces Solid First-Quarter
Operating Earnings of 72 Cents Per Share
RICHMOND, Va. -- Dominion Resources Inc. (NYSE:D) today announced
unaudited consolidated operating earnings for the first quarter ended March
31, 1999 of $138.6 million (72 cents per share), compared to earnings of $139.5
million (72 cents per share) for the same period in 1998.
First-quarter 1999 earnings exclude a one-time non-cash charge
of $254.8 million ($1.32 per share) created by an accounting change resulting
from a new law in Virginia effective July 1 that creates competition among electric
generators and establishes a comprehensive plan for the transition to competition
in the electric utility industry. First-quarter 1998 earnings include a contribution
of $19.2 million (10 cents per share) from East Midlands Electricity, which
Dominion Resources sold in July 1998.
Virginia Power, Dominion Resources’ principal subsidiary,
earned $105.7 million (55 cents per share), up $16 million (9 cents per share)
from earnings of $89.7 million (46 cents per share) in the first quarter of
1998. First-quarter 1999 earnings exclude the non-recurring, non-cash charge
resulting from the new Virginia legislation.
Thos. E. Capps, chairman, president and chief executive officer
of Dominion Resources, attributed the increase in Virginia Power’s net income
to continued improvements in cost management, strong customer growth, and earnings
contributions from its wholesale power marketing operations.
"We’ve consistently stressed that Virginia Power’s strong
fundamentals are the foundation of our long-term strategy to build shareholder
value," Capps said. "Our core strengths were on clear and convincing
display during the first quarter. Earnings at Virginia Power rose despite unusually
mild weather, costs associated with severe damage from winter storms, and lower
revenues from the rate settlement.
"First-quarter earnings were reduced by $26 million
because of milder-than-normal weather, by $8 million because of extraordinary
costs to restore service following severe Christmas and New Year’s Eve ice storms,
and by $27 million because of lower revenues now in place under the final phase
of rate reductions resulting from the 1998 Virginia rate settlement.
Capps said: "To use a baseball analogy, we were thrown
an outside curve and hit a double, but I’m looking forward to seeing what we
can do with a straight pitch. Our impressive first-quarter results clearly indicate
Virginia Power’s strong and growing earnings power going forward."
First-quarter earnings contributions from the company’s two
non-utility businesses, Dominion Energy and Dominion Capital, were virtually
unchanged, totaling $34.2 million (18 cents per share) in 1999 compared to $34
million (18 cents per share) in 1998. First-quarter results for Dominion Energy,
the natural gas and independent power subsidiary, reflect corporate cost efficiencies
and higher earnings from oil and gas operations, offset by a lower contribution
from its foreign power businesses.
First-quarter earnings contributions from Dominion Capital,
the financial services subsidiary, reflect an increase of approximately 50 percent,
or $5.8 million, in its core operating units in 1999 versus 1998. Strong performance
by First Dominion Capital, First Source Financial and Saxon Mortgage was offset
by lower non-core operating results.
"While first-quarter results at our two non-regulated
subsidiaries were flat over 1998, they are on track to grow earnings 15 percent
this year," Capps said. "Given our strengths at the non-utility businesses
and Virginia Power’s superior fundamentals, we are in a solid position to deliver
1999 operating earnings in the $2.95 to $3.00 range, with some upside potential
if the weather cooperates."
Capps continued: "The outlook for Dominion Resources
in the next century is excellent. When our merger with Consolidated Natural
Gas is completed, the company anticipates annualized earnings growth of 8 percent
to 10 percent. The combination of solid earnings growth and our current dividend
yield should provide a handsome total return to our shareholders."
(This release contains forward-looking statements that
are subject to various risks and uncertainties. Discussion of factors that could
cause actual results to differ materially from management’s projections, forecasts,
estimates and expectations is contained in the Company’s Securities & Exchange
Commission filings.)
