BGE profit falls partly because of warm weather; 'End-of-the-year earnings reflect a disappointing year'


Baltimore Gas and Electric Co.'s earnings fell in the fourth quarter of 1998, the company said yesterday, attributing the decline in part to unseasonably warm weather and cost increases.

BGE generated earnings of $13.2 million, or 9 cents per share, in the period that ended Dec. 31, compared with $18.3 million, or 12 cents a share, in the corresponding period of 1997.

BGE's revenue in the quarter totaled $790.4 million, down 2.7 percent from a year earlier.

The company also attributed its fourth-quarter results partially to an "accounting technicality" that recorded a full year of assets depreciation in the fourth quarter, said Kevin Miller, BGE's director of financial planning.

For the year, BGE's earnings fell 4.8 percent to $348.6 million, or $2.20 a share, excluding the impact of $20.9 million in nonrecurring charges. That compares with $366.2 million, or $2.28 a share, in 1997.

After the charges, net income applicable to common stock was $305.9 million last year, or $2.06 a share; after 1997's one-time charges, BGE had earnings applicable to common stock of $254.1 million, or $1.72 a share.

Revenue for 1998 totaled $3.36 billion, up 1.5 percent from 1997's $3.31 billion.

Electricity sales for the year rose 2.4 percent and natural gas sales fell 10.9 percent from 1997 levels.

"Part of our earnings reflect extremely mild temperatures," said Nancy Caplan, a BGE spokeswoman. "We've had the mildest spring and early winter since the 1950s."

As a result, Caplan said, BGE's gas sales were below normal, but electricity sales increased, reflecting hot summer weather.

Overall, she said, the "end-of-the-year earnings reflect a disappointing year.

"We've had a tough year with the restructuring and deregulation of our business," she said. "Maryland is at the beginning of the process, which makes our prospects for the future more uncertain."

Pub Date: 1/19/99

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