ALLETE, Inc. (NYSE:ALE) today reported first quarter 2012 earnings of 66 cents per share on net income of $24.4 million and operating revenue of $240.0 million, compared to $1.07 on net income of $37.2 million and operating revenue of $242.2 million in 2011.
The first quarter of 2011 included the reversal of a $6.2 million, or 18 cent-per-share, deferred tax liability from a settlement agreement approved as part of Minnesota Power’s 2010 rate case.
ALLETE’s Regulated Operations segment, which includes results from Minnesota Power, Superior Water, Light & Power, and the company’s investment in the American Transmission Company, recorded net income of $24.4 million versus $38.4 million in 2011. Last year’s results benefited from the $6.2 million reversal of the deferred tax liability.
Results for this quarter included higher current cost recovery rider revenue, higher costs under the Square Butte purchased power agreement, increased operating and maintenance expenses, and higher depreciation expense than the first quarter of 2011 – all in line with the company’s expectations.
Sales to Minnesota Power’s industrial customers in 2012 were up 1.7 percent compared to a year ago as the company’s taconite customers continued to produce at near full-capacity levels. This increase partially offset the impact of unseasonably warm weather during the first quarter of 2012, which adversely affected sales to residential customers. Total kilowatt-hour sales were down about one percent compared to a year ago. The weather-related impact on earnings was approximately five cents per share for the quarter.
“With the exception of the weather-related impact on earnings, our financial results for the quarter were as we had expected,” said ALLETE Chairman, President and CEO Al Hodnik. “Industrial demand for electricity is strong, and we expect that to continue.”
The Investments and Other segment recorded no net income for the quarter, compared with a $1.2 million net loss in 2011. The year-over-year increase was primarily due to lower state income tax expense and interest expenses, partially offset by higher business development expenses in 2012.