Public Service Enterprise's first-quarter profit drags as interest cost weighs

Public Service Enterprise

30/04/2024 14:07

April 30 (Reuters) - Public Service Enterprise Group
 PEG.N  posted a fall in first-quarter profit on Tuesday, as
higher interest expenses and unfavorable weather weighed on the
electric and gas utility.
    Interest rates in the U.S. have hit multi-decadal highs
since the Federal Reserve began hiking rates last year, leading
to higher borrowing costs.
    The Newark, New Jersey-based company's operating and
maintenance costs, which include restoration costs due to bad
weather, rose 5.4%, while interest expenses climbed about 13.8%
to $205 million in the first quarter.
    New Jersey and other states in the eastern half of the U.S.
experienced a massive winter storm at the start of the year
which knocked out power for many homes and businesses.
    "On the operations side, PSE&G met the challenge of quickly
restoring service to tens of thousands of customers following a
severe rain and windstorm early in the year..." said CEO Ralph
LaRossa.
    The utility's electricity and natural gas distribution
segment, PSE&G, posted a revenue of $2.33 billion in the first
quarter compared with $2.29 billion last year.
    Peer FirstEnergy  FE.N , which also provides electric
services to customers in New Jersey and other states, missed
Wall Street estimates for first-quarter profit last week,
dragged by higher interest expenses and milder weather.
    The company said net income for the first quarter fell to
$532 million, or $1.06 per share, from $1.29 billion, or $2.58
per share, a year ago.
    Operating revenues for the January-March quarter fell to
$2.76 billion from $3.76 billion a year ago.
    The company provides electric and gas services to about 4.3
million customers across New Jersey and also operates
nuclear-generating assets through its PSEG Power segment.
    Public Service Enterprise reaffirmed its full-year adjusted
profit forecast of $3.60 to $3.70 per share, compared with
analysts' expectations of $3.67 per share, according to LSEG
data.
    Adjusted earnings came in line with analysts' estimates at
$1.31 per share, but was below the $1.39 per share in the same
period last year.

 (Reporting by Vallari Srivastava in Bengaluru; Editing by Vijay
Kishore)
 ((Srivastava.Vallari@thomsonreuters.com;))