Alliant earnings miss Wall Street estimates

Alliant Energy's operating earnings grew in the first quarter of 2010 as retail utility rate increases took effect, although still falling short of Wall Street estimates.

The Madison, Wis.-based energy company reported operating earnings of $50.5 million, or 45 cents per share , in the quarter ended March 31. Earnings per share were up 50 percent from the 30 cents reported in the first quarter of 2009.

Revenues fell by 6.2 percent, to $891.3 million.

The parent company of Interstate Power & Light said it earned 45 cents per share on a non-GAAP (Generally Accepted Accounting Principles) basis and 39 cents per share on a GAAP basis. The non-GAAP operating results were up 15 cents per share from the first quarter of 2009.

Non-GAAP earnings fell by 40.9 percent from 66 cents per share. The decline was due mainly to a 38 cent negative impact of one-time non-cash income tax events.

Analysts had expected operating earnings of 51 cents per share, six cents higher than reported, according to Thompson/Reuters I/B/E/S.

Alliant Chairman and CEO Bill Harvey said the higher results were ”primarily driven by rate relief” or rate increases approved for its regulated utility businesses. He said the company still expects to meet its full-year earnings forecast of $2.45 to $2.75 per share.

The higher rates were partly offset by higher fuel costs at the company's Wisconin Power & Light utility, and “regulatory lag” in gaining rate relief for those higher costs. The lag had a five-cent-per-share impact on earnings.

Alliant's Interstate Power & Light utility increased electric rates in Iowa by about 10 percent on March 17. The interim rate increase is part of a 14 percent overall rate request that would generate an additional $163 million in revenue anually.

Natural gas revenues for the quarter fell by $39.7 million, while electric revenues fell by $3.2 million. Industrial electric sales were down 4 percent at Interstate Power & Light, due largely to two large customers who installed their own cogeneration facilities to serve most of their electric needs.

Wisconsin Power & Light implemented new electric and gas rates on Jan. 1 as the result of a rate case filed in May 2009. The increase will generate about $65 million on an annual basis.

Alliant Chief Financial Officer Patricia Kampling said the company is aware of the impact of rate increases on customers coping with the difficult economy. She said the company has proposed a “cost management plan” that will refund $174 million to customers from regulatory reserve accounts over a three-year period to defray the rate increase impact. If approved, it would lower electric rates by 4 percent to result in a final rate increase of about 6 percent for Interstate Power & Light customers.

Alliant filed notice Monday of its intent to seek a 22 percent rate increase for its Interstate Power & Light customers in Minnesota. The increase would generate about $15 million per year if approved.

Shares of Alliant Energy stock were down 2.2 percent at noon on Tuesday, May 4, to $33.76 per share.