Merger costs hold down NV Energy earnings
Costs relating to merging with MidAmerican Energy were responsible for a $6.2 million decline in NV Energy’s second-quarter earnings, compared with 2012, though net income for the year is up by $3 million, the company reported Friday.
In the quarter that ended June 30, NV Energy reported a net income of
$63.2 million, or 27 cents per share, compared to a net income of $69.4 million, or 29 cents per share, in the same period in 2012.
Earnings for the first half of 2013 total $84.7 million compared with $81.6 million in the same period in 2012.
Exceeding analyst expectations, second-quarter revenue totaled $731.6 million, which Yahoo Finance’s estimated at $693 million. Revenue totaled
$740.6 million in the second-quarter of 2012.
NV Energy’s earnings per share income in the second quarter also topped Yahoo’s forecast of 25 cents.
Chief Financial Officer and Executive Vice President Jonathan Halkyard pointed to NV Energy’s merger with MidAmerican Energy to explain lost income this past quarter.
In May, NV Energy announced it is being purchased by MidAmerican Energy Holdings Co. of Berkshire Hathaway Inc., owned by Warren Buffett. The deal is expected to wrap up in 2014.
Merger-related costs, probably related to legal fees, this quarter totaled
$13.6 million before tax, or 4 cents per share after tax.
“If it were not for those costs, we would have delivered year-over-year earnings growth,” Halkyard said during a conference call.
In a statement, NV Energy President and CEO Michael Yackira said reduced reliance on coal power plants, as approved by Legislature this year, also affected earnings. The state Assembly voted to phase out the Reid Gardner coal-fired power plant in June. Instead, the utility will rely on renewable and other traditional energy sources, and the plant will be mostly phased out in 2014.
Despite losses, Yackira and Halkyard said, earnings are still on track. The company expects to earn $1.25 to $1.35 per share in 2013.
Shares of NV Energy were unchanged on Friday at $23.61 on the New York Stock Exchange. They have ranged between $17.41 and $23.73 over the last 52 weeks.
Contact Review-Journal writer Kristy Totten at ktotten@reviewjournal.com.