Avista Doesn’T Expect Earnings To Meet Forcast

Disappointing results from its energy trading operation will again restrain quarterly earnings at Avista Corp., the Spokane company announced Monday.

Chairman Tom Matthews said preliminary estimates indicate Avista per-share income will fall short of the 33 cents predicted by company analysts.

As in the first quarter, he said, weak national energy prices, unfavorable weather in the Northwest and the lack of volatility in energy commodities have hurt Avista Energy, which trades electricity, natural gas and other commodities from offices in Spokane, Houston and Boston.

But June performance has improved, Matthews said, and the turnaround should continue as new employees and systems are integrated into the company.

“Our confidence in those actions will be born out throughout the remainder of the year and into the future,” he said.

The difficulties encountered from February through May probably mean a loss for the year at Avista Energy equal to 10 cents per share, Matthews said.

Monday’s announcement was the second Avista has had to make ahead of the release of company earnings, which won’t come for another month.

D.A. Davidson & Co. analyst Jim Bellessa said initial estimates predicted Avista would earn between $1.55 and $1.60 this year, based on a contribution from Avista Energy of 20 cents to 25 cents.

If, instead, the subsidiary loses 10 cents, results for the whole company will fall to around $1.25, he said.

Bellessa said Matthews, who took over last July 1, is transforming Avista from a conservative utility to a more high-risk energy player, with volatility to match.

Circumstances so far have worked against the strategy, he said, adding that until energy market conditions and the internal changes made by Matthews show some positive effect, investors will remain cool to Avista shares. The stock closed Monday at $17.50, down six cents on very light volume. Avista made its announcement after the close of financial markets on Monday.