Northeast Utilities Swings to Loss

The company guides in line.
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Northeast Utilities

(NU)

swung to a fourth-quarter loss, hit by wholesale contract market changes and restructuring and impairment charges.

The Springfield, Mass.-based utility company lost $13.6 million, or 10 cents a share, in the quarter, compared with earnings of $33.1 million, or 23 cents a share, a year ago. Adjusted earnings were 32 cents a share, in line with Thomson First Call consensus estimates.

Fourth-quarter revenue rose 15% from a year ago to $1.88 billion.

The company affirmed its earlier forecast of $1.09 a share to $1.22 a share for the year 2006, including an additional issue of 23 million shares. Analysts are forecasting earnings of $1.17 a share on revenue of $4.99 billion.

In the fourth quarter, the company's regulated business earned $49.1 million, while the competitive business lost $54.1 million. The loss from the competitive business, all of which is slated or divestment, is primarily due to marking to market and divesting the wholesale energy contracts, the company said.

Northeast Utilities lost $13.68 million from operations, hit by $81.3 million on wholesale contract market changes and $15.7 million on restructuring and impairment charge. However, a tax benefit of $52.7 million helped the company reduce its losses.

"In 2006, we will continue to divest our competitive businesses and invest more heavily in the construction of vital transmission infrastructure improvements in southwest Connecticut. We believe this strategy, when successfully implemented, will result in compounded annual earnings per share growth of between 8 and 10 percent beginning in 2007," the company said.

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