Avista Earnings Below Expectations

Avista Corp.’s first-quarter earnings will fall below analyst expectations, the Spokane company said Monday.

Estimates put the shortfall near 15 cents under analyst consensus expectations that the energy holding company would earn 49 cents for the period ended March 31.

But Chairman Tom Matthews said Avista officials are comfortable with projections that the company will earn between $1.55 and $1.65 per share for all of 1999.

He attributed the first-quarter difficulties to cuts taken in the value of futures positions held by Avista subsidiary Avista Energy.

Regulators require the company to set a value for the whole portfolio that reflects the energy market as of March 31.

Avista Energy resets the value of its portfolio daily. The difference between the two approaches contributes to earnings volatility, said spokesman Pat Lynch.

Prices were depressed throughout the quarter, but results for January and February were not as bad as those for March, he said.

“We view this as a short-term market issue,” Lynch said.

Avista Energy trades electricity and natural gas. The subsidiary last year generated $2.4 billion in revenues.

By comparison, the company’s utility operations produced just over $1 billion in revenues.

But profit margins in the wide-open competition of wholesale energy trading are razor thin.

The stock market, which has punished Avista shares in recent months, took Monday’s news badly. Shares dropped $1 to $14.81, the lowest price in several years.