FPL Group reported on Monday a huge increase in profits for its third quarter, thanks to financial hedging of energy commodities, but the economic downturn caused a decline in the usage of electricity in Florida and the company is working on a multibillion-dollar scale-back on expenses.
Overall, the parent of Florida Power & Light reported profits of $774 million, or $1.92 a share, assisted by a $285 million hedge-fund gain. Operating revenue climbed to $5.4 billion, up from $4.6 billion. Still, the company's stock has been hard hit in recent weeks, falling from $68 in July to close at $40.68 on Monday, down $2.52 for the day. The company's quarterly performance, eliminating the one-time hedging profit, was below analysts' expectations. Analysts say investors are also concerned about FPL Group's unregulated wing, which they fear might be hammered by recession.
Acknowledging recent ''unprecedented events'' in the American economy, FPL Group Chief Executive Lew Hay said Monday during a conference call, ``We will be feeling the tremors for some time to come, but less at FPL Group than elsewhere.''
Overall, 4.5 million existing customers used 4.3 percent less electricity than they did a year ago.
The company attributed 1.5 percent of that to cooler weather, meaning people used their air conditioners less, but 2.8 percent of that was people simply using less power, partly because they're cutting back because of economic fears and partly because growing numbers are buying energy-efficient appliances.
For the third quarter, the utility saw its profit decline from $326 million last year to $314 million this year.
On the unregulated side, FPL Energy suffered because of renewable energy problems. There was significantly less wind in the West than usual, the company reported, although hydro power in Maine was better than usual. These two factors caused an earnings reduction of 7 cents a share.
FPL Group plans to reduce its capital expenditures by $1.7 billion next year, much of that in planned construction of wind farms in the West and Plains states.
Read the full story at miamiherald.com.