DAVID TWIDDY

KANSAS CITY, Mo. (AP) ¿ Westar Energy Inc. said Friday its first-quarter profit fell 28 percent, missing Wall Street expectations as higher expenses and lower sales volume offset rate increases.

The Topeka, Kan.-based utility also said it would cut planned spending for energy generation, environmental upgrades and other capital projects in 2010 and 2011 by $500 million due to the struggling economy and poor equity markets.

"The weakness in the economy has not required us to change our strategy," Chief Financial Officer Mark Ruelle told analysts in a conference call. "It has, however, convinced us that we need to adjust our speed of execution."

Still, the company reaffirmed its full-year earnings forecast of between $1.65 and $1.90 per share, excluding one-time items. Analysts surveyed by Thomson Reuters predict $1.75 per share earnings during the year.

Its shares were steady at $17.99 in afternoon trading.

Westar earned $44 million, or 40 cents per share, during the three months ending March 31, down from $61 million, or 62 cents per share, a year ago.

Not including one-time tax benefits, the company said it would have earned 10 cents per share. Analysts surveyed by Thomson Reuters expected earnings of 21 cents a share. They typically exclude one-time items from their estimates.

Revenue rose 3.7 percent to $422 million from $406.8 million a year ago and above analysts' expectations of $420 million.

The company said retail sales rose 8 percent, as higher prices offset a decline in volume. But wholesale energy sales fell 17 percent on lower prices and slightly higher sales.

Operating expenses were up 5 percent on higher costs for depreciation on new wind and natural gas-powered plants and additional pension expenses.

Westar also said Friday that the Federal Energy Regulatory Commission told the company Thursday that it had tentatively concluded that Westar had violated federal regulations and received $14.3 million in unjustified profits between July 2006 and February 2008.

The company said it didn't agree with the commission's total and is evaluating the agency's findings.

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