10-QPeriod: Q3 FY2004

EVERSOURCE ENERGY Quarterly Report for Q3 Ended Sep 30, 2004

Filed November 5, 2004For Securities:ES

Summary

Eversource Energy (formerly Northeast Utilities) reported solid financial results for the nine months ending September 30, 2004. The company saw a slight increase in net income for the period, reaching $129.4 million compared to $126.3 million in the prior year, with earnings per share rising to $1.01 from $0.99. This growth was driven primarily by the Utility Group, which benefited from rate increases at CL&P and improved tax management. NU Enterprises also contributed positively, though its merchant energy segment experienced some margin compression and lower volumes due to seasonal pricing and cooler weather. The company also provided positive forward guidance, narrowing its 2004 earnings per share forecast to a range of $1.25-$1.35 and projecting 2005 earnings per share between $1.35-$1.45. Significant capital investments are planned for the Utility Group's transmission and distribution infrastructure, totaling over $3.7 billion from 2005-2009, which management expects will drive future rate base growth and support dividend increases. The company also successfully issued new long-term debt to support its capital expenditure program and manage its liquidity.

Key Highlights

  • 1Net income for the nine months ended September 30, 2004, increased to $129.4 million from $126.3 million in the same period of 2003.
  • 2Diluted Earnings Per Share (EPS) for the nine months increased to $1.01 from $0.99 year-over-year.
  • 3The Utility Group, comprising CL&P, PSNH, WMECO, and Yankee Gas, showed improved earnings, driven by rate increases and tax adjustments.
  • 4NU Enterprises' earnings saw an increase for the nine months, despite some pressure on its merchant energy segment's margins.
  • 5Company narrowed its 2004 full-year EPS guidance to $1.25-$1.35 and projected 2005 EPS of $1.35-$1.45.
  • 6Significant capital investments of over $3.7 billion are planned for the Utility Group's transmission and distribution infrastructure from 2005-2009.
  • 7The company successfully issued new long-term debt, including $280 million by CL&P and $50 million by PSNH, to fund capital expenditures and manage liquidity.

Frequently Asked Questions

Eversource Energy (Northeast Utilities) reported a net income of $129.4 million for the first nine months of 2004, an increase from $126.3 million in the same period of 2003. Diluted earnings per share also improved to $1.01 from $0.99, indicating a positive trend in profitability.

The primary drivers of earnings growth were the Utility Group's improved performance, notably from CL&P due to rate increases and tax reserve adjustments, and PSNH benefiting from a lower effective tax rate. NU Enterprises also contributed positively, although the merchant energy segment faced some headwinds.

The company has narrowed its 2004 earnings per share guidance to a range of $1.25 to $1.35. Looking ahead to 2005, Eversource Energy projects earnings per share between $1.35 and $1.45.

Eversource Energy plans to invest over $3.7 billion in its regulated electric and natural gas infrastructure, specifically in transmission and distribution businesses, between 2005 and 2009. This substantial investment is expected to expand the rate base and support future earnings and dividend growth.