Potlatch cuts earnings estimates
Higher energy costs will reduce Potlatch Corp.’s third-quarter earnings to a figure “significantly below” analysts’ estimates of 50 cents per share, company officials said Monday.
Potlatch Chairman Penn Siegel said the company’s fuel bill is about $10 million higher than it was a year ago.
Higher prices are impacting almost every aspect of Potlatch’s operation, he said, from trucking logs to the mills, to manufacturing wood and paper products, to shipping the finished product to consumers, he said.
Potlatch is scheduled to release its third-quarter earnings on Oct. 18. The Spokane-based company has timberlands in Idaho, Arkansas and Minnesota.
Two hearings tonight on Avista requests
Avista Utilities’ Washington and Idaho customers will have an opportunity tonight to comment on proposed rate increases at two separate public forums.
The Washington Utilities and Transportation Commission will hold a hearing on the company’s proposal to increase base rates that will take place from 5 p.m. to 7 p.m. at the Ramada Inn Spokane Airport, 8909 Airport Road. The proposal calls for base electric rates to rise by more than $5 per month, or about 9 percent for residential customers. Natural gas rates would rise by about 57 cents.
The Idaho Public Utilities Commission also will hold a public workshop in Coeur d’Alene, beginning at 7 p.m. today, to answer questions and provide information about Avista’s proposed 24 percent increase in natural gas rates. The workshop will be held in the Driftwood Bay Room of North Idaho College’s student union building, 1000 W. Garden Ave.
The 24 percent increase — which would apply to Washington customers as well — is a pass-through of the higher costs the utility is paying for the commodity. It differs from the Washington electric rate increase, which would be a boost of base rates. Though the Washington commission is not holding a public workshop on that matter, customers are encouraged to submit comments to: comments@wutc.wa.gov or by mail at P.O. Box 47250 Olympia, WA 98504.
Written comments also will be accepted in the Idaho case until Oct. 20 at P.O. Box 83720, Boise, Idaho, 83720-0074, or by email at www.puc.idaho.gov. Click on “comments & questions” and fill in case number AVU-G-05-02.
Delphi bankruptcy imperils GM talks
General Motors Corp. has been negotiating with the United Auto Workers for months in an attempt to lower its skyrocketing health care costs, but those talks could be jeopardized by Delphi Corp.’s bankruptcy, analysts said Monday.
Uncertainty over GM’s situation caused its shares to fall $2.81, or nearly 10 percent, to close at $25.49 on the New York Stock Exchange. Shares of auto supplier Delphi, which filed for bankruptcy on Saturday, fell 76 cents to close at 36 cents.
Standard & Poor’s Ratings Services also lowered GM’s credit rating one level deeper into “junk” status Monday, from BB to BB-, a move that could make it harder for the struggling automaker to borrow money. GM, which is Delphi’s former parent and largest customer, will likely face price increases from Delphi and also is at risk of disrupted supply if there is labor strife at Delphi plants, S&P said.
GM and the UAW have been talking since early spring about ways to cut GM’s annual health care bill, which will grow to $5.6 billion this year. GM has suggested, among other measures, that hourly workers should pay as much for their health care as salaried workers do. The UAW has said it will consider some ways to help GM but won’t reopen its contract with the automaker, which is scheduled to expire in September 2007.
Some industry analysts said the UAW may be less willing to make concessions to GM now because the automaker didn’t prevent Delphi from declaring bankruptcy, putting the supplier’s 24,000 UAW-represented hourly workers at risk of massive pay cuts.
GM spun off Delphi in 1999 but left it with high labor costs, and the supplier is expected to seek cuts in wages and health care during its restructuring.