Vectren Corporation has added a news release to its Investor Relations website. Title: Vectren Expects Second Quarter Earnings Shortfall and Updates 2008 Earnings Guidance
Date: 7/8/2008 5:55:00 PM
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EVANSVILLE, Ind., July 8 /PRNewswire-FirstCall/ -- Vectren Corporation
(NYSE: VVC) today stated it expects second quarter 2008 earnings to be below
analyst estimates as a result of lower nonutility results. The utility
group's second quarter results are expected to show increased earnings over
the same quarter in 2007 and the earnings expectation for the year for the
utility group remains unchanged from previous guidance of $1.46 to $1.54 per
share. The nonutility results for the quarter are expected to be a loss as a
result primarily of the continued low volatility in the wholesale gas markets,
which has significantly impacted ProLiance Energy, LLC's ability to optimize
storage and transportation opportunities. Based primarily on lower earnings
expectations from the company's gas marketing business, the annual earnings
expectations for the nonutility group are lowered to $0.15 to $0.23 per share
(revised from $0.31 to $0.42 per share). Consolidated annual earnings
including corporate and other are expected to be in the range of $1.60 to
$1.75 per share (revised from $1.75 to $1.95 per share).
"As we have observed throughout 2008 and discussed following the first
quarter, the continued lower volatility in the wholesale gas markets has
reduced ProLiance's opportunities for optimization of storage and
transportation resources. Given this continued decline, results will be below
the analyst estimates for the second quarter and we have lowered our
expectation for nonutility operations for the year," explained Niel C.
Ellerbrook, Chairman and Chief Executive Officer.
Ellerbrook added, "The successful execution of regulatory strategies has
strengthened our utility business while providing the necessary capital to
maintain a safe and reliable distribution system. While performance at
ProLiance has not met our expectations for 2008, as we look to the future, we
believe this business and our other nonutility businesses continue to provide
a complementary platform that will provide long term benefit to our
shareholders.
"The construction of our Oaktown mine remains on target and production is
expected to begin in early 2009. Our estimated total coal reserves have
increased to over 120 million tons. During our second quarter earnings
conference call we will discuss our view of the Illinois Basin coal market and
our strategy for 2009 and beyond related to pricing," said Ellerbrook.
2008 Earnings Guidance
These earnings expectations of $1.60 to $1.75 per share are based on
normal weather in the company's electric business for the remainder of 2008
and an assumption of recent lower price volatility throughout 2008 in the
wholesale natural gas markets affecting ProLiance. While the earnings
expectation for the utility group remains unchanged, further deterioration in
the economy beyond that currently anticipated could negatively impact the
utility operations. Changes in these events or other circumstances, including
economic conditions, could materially impact earnings and result in earnings
for 2008 significantly above or below this guidance. These targeted ranges
are subject to such factors discussed below under "Forward-Looking
Statements."
Second Quarter 2008 Earnings Release and Webcast
The company will announce its 2008 second quarter results after the market
closes on Thursday, July 31, 2008. Vectren management will discuss those
results during a conference call on Friday, August 1, 2008 at 9:00 a.m. EDT.
About Vectren
Vectren Corporation is an energy holding company headquartered in
Evansville, Indiana. Vectren's energy delivery subsidiaries provide gas
and/or electricity to over one million customers in adjoining service
territories that cover nearly two-thirds of Indiana and west central Ohio.
Vectren's nonutility subsidiaries and affiliates currently offer energy-
related products and services to customers throughout the Midwest and
Southeast. These include gas marketing and related services; coal production
and sales and energy infrastructure services. To learn more about Vectren,
visit www.vectren.com
Forward-Looking Statements
All statements other than statements of historical fact included in this
news release are forward-looking statements made in good faith by the company
and are intended to qualify for the safe harbor from liability established by
the Private Securities Litigation Reform Act of 1995. Such statements are
based on management's beliefs, as well as assumptions made by and information
currently available to management and include such words as "believe",
"anticipate", "endeavor", "estimate", "expect", "objective", "projection",
"forecast", "goal", and similar expressions intended to identify forward-
looking statements. Vectren cautions readers that the assumptions forming the
basis for forward-looking statements include many factors that are beyond
Vectren's ability to control or estimate precisely and actual results could
differ materially from those contained in this document.
In addition to any assumptions and other factors referred to specifically
in connection with such forward-looking statements, factors that could cause
the company's actual results to differ materially from those contemplated in
any forward-looking statements include, but are not limited to, factors
affecting utility operations such as unusual weather conditions; catastrophic
weather-related damage; unusual maintenance or repairs; unanticipated changes
to fossil fuel costs; unanticipated changes to gas transportation and storage
costs, or availability due to higher demand, shortages, transportation
problems or other developments; environmental or pipeline incidents;
transmission or distribution incidents; unanticipated changes to electric
energy supply costs, or availability due to demand, shortages, transmission
problems or other developments; or electric transmission or gas pipeline
system constraints; increased competition in the energy industry including
effects of industry restructuring and unbundling; regulatory factors such as
unanticipated changes in rate-setting policies or procedures, recovery of
investments and costs made under traditional regulation, and the frequency and
timing of rate increases; financial, regulatory or accounting principles or
policies imposed by the Financial Accounting Standards Board; the Securities
and Exchange Commission; the Federal Energy Regulatory Commission; state
public utility commissions; state entities which regulate electric and natural
gas transmission and distribution, natural gas gathering and processing,
electric power supply; and similar entities with regulatory oversight;
economic conditions including the effects of an economic downturn, inflation
rates, commodity prices, and monetary fluctuations; increased natural gas
commodity prices and the potential impact on customer consumption,
uncollectible accounts expense, unaccounted for gas and interest expense;
changing market conditions and a variety of other factors associated with
physical energy and financial trading activities including, but not limited
to, price, basis, credit, liquidity, volatility, capacity, interest rate, and
warranty risks; the performance of projects undertaken by the company's
nonutility businesses and the success of efforts to invest in and develop new
opportunities, including but not limited to, the realization of synfuel income
tax credits and the company's coal mining, gas marketing, and energy
infrastructure strategies; direct or indirect effects on the company's
business, financial condition, liquidity and results of operations resulting
from changes in credit ratings, changes in interest rates, and/or changes in
market perceptions of the utility industry and other energy-related
industries; employee or contractor workforce factors including changes in key
executives, collective bargaining agreements with union employees, aging
workforce issues, or work stoppages; legal and regulatory delays and other
obstacles associated with mergers, acquisitions and investments in joint
ventures; costs, fines, penalties and other effects of legal and
administrative proceedings, settlements, investigations, claims, including,
but not limited to, such matters involving compliance with state and federal
laws and the interpretation of these laws; changes in federal, state or local
legislative requirements, such as changes in tax laws or rates, environmental
laws, including laws governing greenhouse gases, mandates of sources of
renewable energy, and other regulations.
More detailed information about these factors is set forth in Vectren's
filings with the Securities and Exchange Commission, including Vectren's 2007
annual report on Form 10-K filed on February 20, 2008. The company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of changes in actual results, changes in assumptions, or
other factors affecting such statements.
SOURCE Vectren Corporation
-0- 07/08/2008
/CONTACT: Investors, Steven M. Schein, +1-812-491-4209,
sschein@vectren.com; Media, Jeffrey W. Whiteside, +1-812-491-4205,
jwhiteside@vectren.com/
/Web site: http://www.vectren.com /
(VVC)
CO: Vectren Corporation
ST: Indiana, Ohio
IN: OIL UTI
SU: ERP
CB-KK
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0278 07/08/2008 17:55 EDT http://www.prnewswire.com
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