PG&E (NYSE:PCG) reported a 79% jump in third-quarter profit on Monday as margins started to improve despite weaker-than-expected revenues and ongoing charges related to a pipeline explosion two years ago.
The San Francisco-based utility posted net income of $361 million, or 84 cents a share, compared with a year-earlier $200 million, or 50 cents.
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Excluding one-time costs related to natural gas pipelines, PG&E said it earned 93 cents, topping average analyst estimates of 88 cents in a Thomson Reuters poll.
“Our results for the quarter reflect continued progress in our ongoing efforts to improve PG&E’s operations across the business, with a clear focus on making our system the safest in the country and delivering service reliably and affordably,” CEO Tony Earley said in a statement.
Revenue for the three months ended Sept. 30 was $3.97 billion, up from $3.86 billion a year ago, missing the Street’s view of $4.05 billion.
Ignoring the potential impacts of Hurricane Sandy, which could shut power for millions of people on the East Coast, PG&E reaffirmed its fiscal 2012 non-GAAP earnings of $3.10 to $3.30 a share, bracketing the consensus’ $3.16.
The electricity company’s earnings were reduced significantly last quarter by liability charges related to the San Bruno pipeline accident in 2010 as well as cleanup costs associated with its natural gas compressor station in Hinkley, California.
PG&E incurred a total cost of $915 million during the quarter related to safety work and strength testing on its pipelines and legal expenses.
“We remain fully committed to resolving our gas pipeline issues, positioning PG&E for long-term success, and rebuilding relationships with customers and others,” Earley said.
It forecasts $450 million to $550 million in pipeline-related costs this year.