WPS Resources Corporation Reports Earnings for First Quarter of 2001

Apr 19, 2001, 01:00 ET from WPS Resources Corporation

    GREEN BAY, Wis., April 19 /PRNewswire/ -- Basic and diluted earnings per
 share of WPS Resources Corporation's common stock (NYSE:   WPS) were $0.89 in
 the first quarter of 2001 compared with $1.10 in the first quarter of 2000.
 "Overall earnings are on target to meet our projections for 2001 even though
 electric utility earnings were down," stated Larry Weyers, WPS Resources
 Chairman, President, and CEO.  "Earnings from nonregulated subsidiaries were
 up 27% compared with the first quarter of 2000, and we expect continuing
 improvement from these subsidiaries throughout the year."
 
     First Quarter Results
     WPS Resources' consolidated net income was $23.6 million for the quarter
 ended March 31, 2001, compared with $29.2 million for the same period in 2000.
 Net income from utility operations decreased $5.3 million.  Net income from
 WPS Energy Services, Inc. decreased  $0.3 million and net income from WPS
 Power Development, Inc. increased $0.7 million.  Net income from Holding
 Company and Other operations decreased $0.7 million.
     Segment net income and revenue for the quarters ended March 31 are listed
 in the following table.
 
                     WPS Resources' Net Income and Revenue
            For the Quarters Ended March 31, 2001 and March 31, 2000
 
     Segment                     Net Income                   Revenue
                             2001          2000          2001          2000
                        (in millions) (in millions) (in millions) (in millions)
     Electric Utility       $14.6         $20.2        $169.6        $158.0
     Gas Utility              8.8           8.5         162.5          76.2
     WPS Energy Services      0.2           0.5         634.2         146.0
     WPS Power Development    1.7           1.0          41.7          29.0
     Holding Company and
      Other                  (1.7)         (1.0)          0.3           3.2
     Intersegment
      Eliminations             --            --         (10.9)        (13.6)
     Total WPS Resources    $23.6         $29.2        $997.4        $398.8
 
 
     WPS Resources' Electric Utility segment includes two wholly-owned
 regulated utility subsidiaries, Wisconsin Public Service Corporation and Upper
 Peninsula Power Company.  The Gas Utility segment consists of the gas
 operations at Wisconsin Public Service.  Nonregulated segments include WPS
 Energy Services, a diversified energy supply and services company, and WPS
 Power Development, an electric generation asset development company.  The
 Holding Company and Other segment includes the operations of the WPS Resources
 holding company and the nonutility activities at Wisconsin Public Service and
 Upper Peninsula Power.
 
 
              Detail of WPS Resources' Earnings Per Share Changes
          Between the Quarters Ended March 31, 2001 and March 31, 2000
 
                                                   Dollar Impact  Earnings Per
                                                    In Millions   Share Impact
                                                    (Before Tax)   (After Tax)
     Decrease in Electric Utility Margin              ($ 1.0)        ($0.02)
     Increase in Gas Utility Margin                      2.4           0.05
     Decrease in WPS Power Development's Margin         (2.0)         (0.05)
     Increase in Other Operating Expenses              (12.7)         (0.29)
     Increase in Interest Expense                       (3.2)         (0.07)
     Increase in WPS Power Development's Tax Credits     3.5           0.13
     Change in Other Items and Rounding                                0.04
     Total Earnings Per Share Impact                                 ($0.21)
 
 
     Utility margins at Wisconsin Public Service Corporation were impacted by a
 Public Service Commission of Wisconsin rate order authorizing a 5.4% increase
 in Wisconsin retail electric rates and a 1.5% increase in Wisconsin retail gas
 rates effective January 1, 2001.  The consolidated electric utility margin
 decreased, however, in spite of the increase in Wisconsin retail electric
 rates and a 2% increase in overall sales volumes at Wisconsin Public Service.
 The primary reasons for the lower margin were higher fuel and purchased power
 costs.  Also affecting the margin was a change in the customer mix at
 Wisconsin Public Service.  Sales to lower margin, non-firm customers,
 increased more than sales to higher margin customers.
     The weather was normal in the first quarter of 2001, but 9% colder than in
 the first quarter of 2000.  Gas throughput volumes increased 6% to residential
 customers and 10% to small commercial and industrial customers resulting in a
 higher gas utility margin.
     Revenues increased at WPS Energy Services due to high natural gas prices
 and increased wholesale activity.  Margins remained fairly stable at WPS
 Energy Services.
     WPS Power Development's margin decreased largely due to costs associated
 with higher fuel and purchased power at its Sunbury generation plant.
     Utility operating expenses increased $8.3 million largely due to increased
 payments to the Wisconsin Department of Administration for demand-side
 management (energy conservation) activities, increased benefit expenses, and
 higher transmission costs as the result of the establishment of American
 Transmission Company.  Operating expenses at WPS Power Development increased
 $3.3 million primarily due to costs associated with accelerated maintenance at
 the Sunbury generation plant.
     Interest expense increased due to additional short-term borrowing for
 working capital needs.
     Additional tax credits received from WPS Power Development's coal
 synthetic fuel operation resulted in lower taxes in the first quarter of 2001.
     Wisconsin Public Service recognized a one-time before-tax gain of
 $0.8 million on the sale of property in the first quarter of 2001.
 
     2001 Earnings Forecast
     WPS Resources is on target to achieve estimated earnings per share for the
 year 2001 in the range of $2.55 to $2.65 per share.  This estimate assumes
 normal weather, the recently approved Wisconsin rate order, the closing of the
 Wisconsin Fuel and Light purchase in the second quarter (the dilution could be
 about five cents per share for the year), and the anticipated issuance of
 additional common stock.  The company also anticipates a rate increase for
 Upper Peninsula Power to be approved by the Michigan Public Service Commission
 in the second quarter.  WPS Resources' goal during 2001 is for WPS Energy
 Services and WPS Power Development to contribute approximately 10% to 15% of
 consolidated earnings.
 
     Conference Call
     An earnings conference call is scheduled for 3 p.m. central time on
 Thursday, April 19.  Patrick D. Schrickel, WPS Resources' Executive Vice
 President, will discuss highlights.  To access the call, which is open to the
 public, call 888-566-0007 (toll free) 15 minutes prior to the scheduled start
 time.  The passcode is EARNINGS and the leader is Mr. Patrick D. Schrickel.
 Callers will be placed on hold with music until the call begins.  A replay of
 the conference call will be available through May 3, 2001 by dialing
 800-925-0263.
 
     Forward-Looking Statements
     This press release contains forward-looking statements regarding the
 realization of projected results for 2001 for WPS Resources and its
 subsidiaries.  Forward-looking statements are beyond the ability of WPS
 Resources to control and, in many cases, WPS Resources cannot predict what
 factors would cause actual results to differ materially from those indicated
 by forward-looking statements.  The following factors, and other factors not
 listed here, could cause actual results to differ materially from those
 contained in forward-looking statements.
     -- General economic, business, and regulatory conditions
     -- Legislative and regulatory initiatives regarding deregulation and
        restructuring of the utility industry which could affect costs and
        investment recovery
     -- State and federal rate regulation
     -- Growth and competition and the extent and timing of new business
        development in the markets of subsidiary companies
     -- The performance of projects undertaken by subsidiary companies
     -- Energy supply and demand
     -- Financial market conditions, including availability, terms, and use of
        capital
     -- Nuclear and environmental issues
     -- Weather and other natural phenomena
     -- Commodity price and interest rate risk
     -- Federal and state tax policies
 
 
     WPS RE

SOURCES CORPORATION EARNINGS ANALYSIS (THOUSANDS, EXCEPT PER SHARE AMOUNTS) QUARTER ENDED % MARCH 31 CHANGE 2001 2000 REVENUES $997,435 $398,849 150.1 OPERATING EXPENSES 960,654 356,116 169.8 OPERATING INCOME 36,781 42,733 (13.9) OTHER INCOME/(DEDUCTIONS) 3,842 6,564 (41.5) INCOME BEFORE INTEREST AND TAXES 40,623 49,297 (17.6) INTEREST EXPENSE AND DISTRIBUTIONS 15,229 12,050 26.4 INCOME TAXES 1,063 7,237 (85.3) PREFERRED STOCK DIVIDENDS OF SUBSIDIARY 778 778 0.0 NET INCOME $23,553 $29,232 (19.4) AVERAGE SHARES OF COMMON STOCK 26,456 26,634 (0.7) EARNINGS PER SHARE $0.89 $1.10 (19.1) HEATING DEGREE DAYS 3,795 3,481 9.0 WPS RE

SOURCES CORPORATION EARNINGS ANALYSIS (THOUSANDS, EXCEPT PER SHARE AMOUNTS) TWELVE MONTHS ENDED % MARCH 31 CHANGE 2001 2000 REVENUES $2,550,160 $1,167,555 118.4 OPERATING EXPENSES 2,443,282 1,046,531 133.5 OPERATING INCOME $106,878 121,024 (11.7) OTHER INCOME/(DEDUCTIONS) 14,838 12,787 16.0 INCOME BEFORE INTEREST AND TAXES 121,716 133,811 (9.0) INTEREST EXPENSE AND DISTRIBUTIONS 57,460 40,300 42.6 INCOME TAXES (169) 24,355 (100.7) PREFERRED STOCK DIVIDENDS OF SUBSIDIARY 3,111 3,111 0.0 NET INCOME $61,314 $66,045 (7.2) AVERAGE SHARES OF COMMON STOCK 26,418 26,672 (1.0) EARNINGS PER SHARE $2.32 $2.48 (6.5) HEATING DEGREE DAYS 8,155 7,231 12.8

SOURCE WPS Resources Corporation
    GREEN BAY, Wis., April 19 /PRNewswire/ -- Basic and diluted earnings per
 share of WPS Resources Corporation's common stock (NYSE:   WPS) were $0.89 in
 the first quarter of 2001 compared with $1.10 in the first quarter of 2000.
 "Overall earnings are on target to meet our projections for 2001 even though
 electric utility earnings were down," stated Larry Weyers, WPS Resources
 Chairman, President, and CEO.  "Earnings from nonregulated subsidiaries were
 up 27% compared with the first quarter of 2000, and we expect continuing
 improvement from these subsidiaries throughout the year."
 
     First Quarter Results
     WPS Resources' consolidated net income was $23.6 million for the quarter
 ended March 31, 2001, compared with $29.2 million for the same period in 2000.
 Net income from utility operations decreased $5.3 million.  Net income from
 WPS Energy Services, Inc. decreased  $0.3 million and net income from WPS
 Power Development, Inc. increased $0.7 million.  Net income from Holding
 Company and Other operations decreased $0.7 million.
     Segment net income and revenue for the quarters ended March 31 are listed
 in the following table.
 
                     WPS Resources' Net Income and Revenue
            For the Quarters Ended March 31, 2001 and March 31, 2000
 
     Segment                     Net Income                   Revenue
                             2001          2000          2001          2000
                        (in millions) (in millions) (in millions) (in millions)
     Electric Utility       $14.6         $20.2        $169.6        $158.0
     Gas Utility              8.8           8.5         162.5          76.2
     WPS Energy Services      0.2           0.5         634.2         146.0
     WPS Power Development    1.7           1.0          41.7          29.0
     Holding Company and
      Other                  (1.7)         (1.0)          0.3           3.2
     Intersegment
      Eliminations             --            --         (10.9)        (13.6)
     Total WPS Resources    $23.6         $29.2        $997.4        $398.8
 
 
     WPS Resources' Electric Utility segment includes two wholly-owned
 regulated utility subsidiaries, Wisconsin Public Service Corporation and Upper
 Peninsula Power Company.  The Gas Utility segment consists of the gas
 operations at Wisconsin Public Service.  Nonregulated segments include WPS
 Energy Services, a diversified energy supply and services company, and WPS
 Power Development, an electric generation asset development company.  The
 Holding Company and Other segment includes the operations of the WPS Resources
 holding company and the nonutility activities at Wisconsin Public Service and
 Upper Peninsula Power.
 
 
              Detail of WPS Resources' Earnings Per Share Changes
          Between the Quarters Ended March 31, 2001 and March 31, 2000
 
                                                   Dollar Impact  Earnings Per
                                                    In Millions   Share Impact
                                                    (Before Tax)   (After Tax)
     Decrease in Electric Utility Margin              ($ 1.0)        ($0.02)
     Increase in Gas Utility Margin                      2.4           0.05
     Decrease in WPS Power Development's Margin         (2.0)         (0.05)
     Increase in Other Operating Expenses              (12.7)         (0.29)
     Increase in Interest Expense                       (3.2)         (0.07)
     Increase in WPS Power Development's Tax Credits     3.5           0.13
     Change in Other Items and Rounding                                0.04
     Total Earnings Per Share Impact                                 ($0.21)
 
 
     Utility margins at Wisconsin Public Service Corporation were impacted by a
 Public Service Commission of Wisconsin rate order authorizing a 5.4% increase
 in Wisconsin retail electric rates and a 1.5% increase in Wisconsin retail gas
 rates effective January 1, 2001.  The consolidated electric utility margin
 decreased, however, in spite of the increase in Wisconsin retail electric
 rates and a 2% increase in overall sales volumes at Wisconsin Public Service.
 The primary reasons for the lower margin were higher fuel and purchased power
 costs.  Also affecting the margin was a change in the customer mix at
 Wisconsin Public Service.  Sales to lower margin, non-firm customers,
 increased more than sales to higher margin customers.
     The weather was normal in the first quarter of 2001, but 9% colder than in
 the first quarter of 2000.  Gas throughput volumes increased 6% to residential
 customers and 10% to small commercial and industrial customers resulting in a
 higher gas utility margin.
     Revenues increased at WPS Energy Services due to high natural gas prices
 and increased wholesale activity.  Margins remained fairly stable at WPS
 Energy Services.
     WPS Power Development's margin decreased largely due to costs associated
 with higher fuel and purchased power at its Sunbury generation plant.
     Utility operating expenses increased $8.3 million largely due to increased
 payments to the Wisconsin Department of Administration for demand-side
 management (energy conservation) activities, increased benefit expenses, and
 higher transmission costs as the result of the establishment of American
 Transmission Company.  Operating expenses at WPS Power Development increased
 $3.3 million primarily due to costs associated with accelerated maintenance at
 the Sunbury generation plant.
     Interest expense increased due to additional short-term borrowing for
 working capital needs.
     Additional tax credits received from WPS Power Development's coal
 synthetic fuel operation resulted in lower taxes in the first quarter of 2001.
     Wisconsin Public Service recognized a one-time before-tax gain of
 $0.8 million on the sale of property in the first quarter of 2001.
 
     2001 Earnings Forecast
     WPS Resources is on target to achieve estimated earnings per share for the
 year 2001 in the range of $2.55 to $2.65 per share.  This estimate assumes
 normal weather, the recently approved Wisconsin rate order, the closing of the
 Wisconsin Fuel and Light purchase in the second quarter (the dilution could be
 about five cents per share for the year), and the anticipated issuance of
 additional common stock.  The company also anticipates a rate increase for
 Upper Peninsula Power to be approved by the Michigan Public Service Commission
 in the second quarter.  WPS Resources' goal during 2001 is for WPS Energy
 Services and WPS Power Development to contribute approximately 10% to 15% of
 consolidated earnings.
 
     Conference Call
     An earnings conference call is scheduled for 3 p.m. central time on
 Thursday, April 19.  Patrick D. Schrickel, WPS Resources' Executive Vice
 President, will discuss highlights.  To access the call, which is open to the
 public, call 888-566-0007 (toll free) 15 minutes prior to the scheduled start
 time.  The passcode is EARNINGS and the leader is Mr. Patrick D. Schrickel.
 Callers will be placed on hold with music until the call begins.  A replay of
 the conference call will be available through May 3, 2001 by dialing
 800-925-0263.
 
     Forward-Looking Statements
     This press release contains forward-looking statements regarding the
 realization of projected results for 2001 for WPS Resources and its
 subsidiaries.  Forward-looking statements are beyond the ability of WPS
 Resources to control and, in many cases, WPS Resources cannot predict what
 factors would cause actual results to differ materially from those indicated
 by forward-looking statements.  The following factors, and other factors not
 listed here, could cause actual results to differ materially from those
 contained in forward-looking statements.
     -- General economic, business, and regulatory conditions
     -- Legislative and regulatory initiatives regarding deregulation and
        restructuring of the utility industry which could affect costs and
        investment recovery
     -- State and federal rate regulation
     -- Growth and competition and the extent and timing of new business
        development in the markets of subsidiary companies
     -- The performance of projects undertaken by subsidiary companies
     -- Energy supply and demand
     -- Financial market conditions, including availability, terms, and use of
        capital
     -- Nuclear and environmental issues
     -- Weather and other natural phenomena
     -- Commodity price and interest rate risk
     -- Federal and state tax policies
 
 
     WPS RESOURCES CORPORATION
     EARNINGS ANALYSIS
 
     (THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
                                                 QUARTER ENDED           %
                                                    MARCH 31           CHANGE
                                                2001         2000
 
     REVENUES                                 $997,435     $398,849     150.1
 
     OPERATING EXPENSES                        960,654      356,116     169.8
 
     OPERATING INCOME                           36,781       42,733     (13.9)
 
     OTHER INCOME/(DEDUCTIONS)                   3,842        6,564     (41.5)
 
     INCOME BEFORE INTEREST AND TAXES           40,623       49,297     (17.6)
 
     INTEREST EXPENSE AND DISTRIBUTIONS         15,229       12,050      26.4
 
     INCOME TAXES                                1,063        7,237     (85.3)
 
     PREFERRED STOCK DIVIDENDS OF
      SUBSIDIARY                                   778          778       0.0
 
     NET INCOME                                $23,553      $29,232     (19.4)
 
     AVERAGE SHARES OF COMMON STOCK             26,456       26,634      (0.7)
 
     EARNINGS PER SHARE                          $0.89        $1.10     (19.1)
 
     HEATING DEGREE DAYS                         3,795        3,481       9.0
 
 
     WPS RESOURCES CORPORATION
     EARNINGS ANALYSIS
 
     (THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
                                                TWELVE MONTHS
                                                    ENDED               %
                                                   MARCH 31          CHANGE
 
                                               2001         2000
 
     REVENUES                               $2,550,160   $1,167,555    118.4
 
     OPERATING EXPENSES                      2,443,282    1,046,531    133.5
 
     OPERATING INCOME                         $106,878      121,024    (11.7)
 
     OTHER INCOME/(DEDUCTIONS)                  14,838       12,787     16.0
 
     INCOME BEFORE INTEREST AND TAXES          121,716      133,811     (9.0)
 
     INTEREST EXPENSE AND DISTRIBUTIONS         57,460       40,300     42.6
 
     INCOME TAXES                                 (169)      24,355   (100.7)
 
     PREFERRED STOCK DIVIDENDS OF
      SUBSIDIARY                                 3,111        3,111      0.0
 
     NET INCOME                                $61,314      $66,045     (7.2)
 
     AVERAGE SHARES OF COMMON STOCK             26,418       26,672     (1.0)
 
     EARNINGS PER SHARE                          $2.32        $2.48     (6.5)
 
     HEATING DEGREE DAYS                         8,155        7,231     12.8
 
 SOURCE  WPS Resources Corporation