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Allegheny posts third-quarter profit

October 29, 2005|By DANIEL J. SERNOVITZ

daniels@herald-mail.com

GREENSBURG, PA. - Allegheny Energy posted $35.7 million in consolidated net income for the third quarter of 2005, up from a net loss of $376.8 million during the same period last year, as the company continued to make strides toward financial recovery after an expansion effort that nearly led to the company's financial ruin.

For the first nine months of the year, the Greensburg-based company reported consolidated net income of $59.9 million, or 38 cents per diluted share, up from a net loss of $383 million, or $2.97 per diluted share, for the first nine months of 2004.

"I'm delighted to report that we had strong profitability in the third quarter," Allegheny President and Chief Executive Officer Paul J. Evanson told investors during a conference call Friday morning. "While that rate of growth is, obviously, not sustainable, we do believe we can continue delivering earnings growth well above the industry average in 2006 and beyond."

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Both sets of figures were influenced by what Allegheny Senior Vice President and Chief Financial Officer Jeffrey Serkes termed unusual events, including the completed sale of the company's West Virginia generating facility for $130 million this year and $427.5 million in losses last year from discontinued operations.

Driven by higher market prices, increased power-plant output and the inception of market-based rates in Maryland, the company posted $121.8 million in increased operating revenue for the quarter. As a result of Maryland's switch to market-based rates, which affected Allegheny's commercial and industrial customers starting in January, the utility posted $37 million in additional revenue for the last three months over the same period in 2004.

"In conclusion, we had a very positive third quarter and we continue to execute well in all of our major priorities for the year," Evanson said during the conference call.

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