Cool Spell Cuts Profits For Wwp

Washington Water Power Co. third-quarter earnings suffered from a cool summer, higher generation costs and expenses associated with expanding its national energy businesses.

The Spokane-based utility Tuesday reported net income for the period ended Sept. 30 of $12.3 million, or 22 cents per share, compared with $16.6 million, or 30 cents per share, for the same three months a year ago.

Revenues for the quarter increased to $295.1 million from $219.8 million a year ago.

But expenses, notably fuel costs, power purchases and costs related to Avista Energy and Avista Advantage, outpaced revenue growth.

For the first nine months of the year, WWP earned $99.4 million, or $1.55 per share, compared with $93.4 million, or $1.13 per share, for the same period last year.

Third-quarter 1996 figures were helped by positive tax adjustments.

Chairman Paul Redmond said temperatures 18 percent cooler than normal reduced retail revenues from natural gas and electricity sales in its service territories by $7 million.

And even though wholesale revenues jumped almost 50 percent to $93.4 million, he said, a squeeze on margins continued.

In the last 12 months, wholesale revenues reached $322.2 million, almost $140 million higher than the prior year. But the cost of generation to help supply new customers grew by $32.5 million.

Redmond said the costs of building Avista Energy and Avista Advantage, WWP’s national energy businesses, trimmed two cents from per share earnings for the quarter.

Avista Advantage growth has lagged management expectations, he said, but Avista Energy made a profit in September, less than six months after start-up.

Non-utility businesses held under the Pentzer Corp. umbrella contributed net income of $6.6 million, or 12 cents per share, for the quarter. Those results were slightly better than last year’s.

In other earnings reports Tuesday:

Key Tronic Corp. said profits for the first quarter of fiscal 1998 slipped from the same quarter a year ago.

The company reported net income of $143,000, or one cent per share, on sales of $40.3 million for the quarter ended Sept. 27.

That compares with net income of $207,000, or two cents per share, on sales of $45.3 million during the first quarter of fiscal 1997.

Company officials attributed the decline in sales to a 10 percent reduction in the average selling price of Key Tronic keyboards, its largest product category.

Key Tronic President and CEO Jack Oehlke said the company has reduced total operating expenses by 15 percent during the quarter, while it has continued to introduce new technologies like its digitized pen tablets.

Sterling Financial Corp. reported improved third-quarter earnings based on higher net interest income and stronger business, construction and consumer lending.

The holding company for Sterling Savings Association had net income of $2.5 million, or 33 cents per share, for the period ended Sept. 30.

A year ago, the thrift lost $3.3 million, or 68 cents per share.

Those results reflect a one-time $5.8 million assessment for deposit insurance and other charges of $2.5 million.

For the first nine months of the year, Sterling earned $7.1 million, or 92 cents per share, compared with $288,000, or less than a penny per share, for the 1996 period.

Net interest income grew 21 percent to $11.6 million for the quarter. Assets increased 22 percent to $1.87 billion on Sept. 30. Return on average common equity edged up to 13 percent, and return on average assets was .56 percent for the quarter.

, DataTimes