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PG&E's Third-Quarter Profit Falls 18%

The state's largest power supplier beat analysts' estimates despite taking a loss.

October 22, 1998| From Bloomberg News

PG&E Corp., California's largest power company, said Wednesday that third-quarter profit fell a less-than-expected 18% on increased sales of electricity outside the state.

Net income fell to $210 million, or 55 cents a share, from $257 million, or 62 cents, a year earlier. PG&E was expected to earn 47 cents, the average estimate of analysts polled by First Call Corp. Its shares rose 69 cents to close at $32.13 on the New York Stock Exchange.

In the second quarter since deregulation opened California's electricity market to competition, PG&E said it retained 99% of its residential customers and expanded electricity sales to businesses.

"PG&E's got a solid wholesale trading team, but there are a lot of unknowns for the utility," said Redwood Securities analyst Alan Lindstrom.

San Francisco-based PG&E provides electricity and natural gas to 8.2 million California customers, owns pipelines and power plants, and arranges electricity sales nationwide. Its power-generation and energy-trading businesses contributed 2 cents a share to third-quarter earnings, compared with a 3 cent loss a year ago.

Revenue rose 31% to $5.31 billion from $4.06 billion, most of which came from increased electricity sales to other utilities and large industrial consumers. Revenue from Pacific Gas & Electric Co., PG&E's utility, was steady at $2.5 billion.

Analysts expect PG&E to earn 43 cents in the fourth quarter, bringing profit for the year to $1.78 a share. But if Proposition 9 on the November ballot--which would double a consumer utility rate cut to 20%, passes--it could push PG&E to write down the value of its Diablo Canyon nuclear plant by as much as $3 billion, analysts said.

At a Glance:

* Santa Monica-based GeoCities reported a third-quarter net loss of $4.1 million, or 14 cents per share, on revenue of $5.3 million, compared with a net loss of $2.3 million, or 12 cents, on sales of $1.3 million. GeoCities, which offers personal Web sites, went public in August.

* MetaCreations Corp., citing weak domestic and Asian demand, reported a third-quarter net loss of $3.0 million, or 12 cents per share, compared with net income of $2.6 million, or 15 cents, a year earlier. The Carpinteria-based graphics software company said revenue was down 57% to $9.1 million $21.0 million a year ago.

* California Micro Devices Corp. reported a net loss of $770,000, or 8 cents per share, on revenue of $8.3 million, for the third quarter ended Sept. 30, compared with a net loss of $615,000, or 6 cents, on revenue of $8.1 million a year ago.

* Fremont-based Cirrus Logic Inc., once a dominant maker of chips for computer graphics, said profit fell 88% in its fiscal second quarter as chip sales slumped. Profit before a charge was $1.1 million, or 2 cents a share, compared with net income of $8.9 million, or 13 cents a share, a year ago. Cirrus was expected to lose 2 cents. Sales fell 24% to $169.7 million from $224 million.

* Informix Corp. reported better-than-expected third-quarter earnings as the No. 5 database software maker benefited from reduced expenses. Menlo Park-based Informix said net income was $18.4 million, or 10 cents a diluted share, contrasted with a loss of $110.5 million, or 73 cents, a year earlier. Revenue rose 23% to $185.2 million from $150.2 million. Per-share earnings beat estimates of 6 cents.



California Earnings

A sampling of companies reporting quarterly earnings Wednesday, ranked by year-over-year growth, and companies due to report today, ranked by analysts' forecast change in earnings per share (EPS) from the year-ago quarter, compiled by First Call:

Reporting Wednesday


Pct. above/ 1997 Year- Ticker Consensus Actual below 3rd-qtr. over-year Company symbol EPS EPS estimate EPS % growth Fidelity National FNF $0.81 $0.96 +19% $0.48 Minimed MNMD 0.23 0.23 0 0.14 +64 Day Runner DAYR 0.40 0.40 0 0.35 National Golf Prop. TEE 0.57 0.57 0 0.61 PG&E PCG 0.47 0.55 +17 0.62 Allergan AGN 0.46 0.51 +11 0.66 Occidental OXY 0.00 0.10 NM* 0.57 Callaway Golf ELY -0.01 0.08 NM* 0.52 Read-Rite RDRT -0.68 -0.61 +10 0.61 Silicon Graphics SGI -0.45 -0.41 NM* -0.20

Pct. above/ Ticker Company symbol Fidelity National +100% Minimed MNMD Day Runner +14 National Golf Prop. -7 PG&E -11 Allergan -23 Occidental -82 Callaway Golf -85 Read-Rite NM* Silicon Graphics NM*


Reporting Today


Ticker Consensus Year-ago Predicted Company symbol EPS estimate quarter pct. chg. Vet Centers of America VCAI $0.22 $0.16 +38% Unova UNA 0.24 0.20 +20 Viking Office Products VKNG 0.25 0.21 +19 LTC Property LTC 0.43 0.39 +10 Reliance Steel RS 0.60 0.55 +9 Diagnostic DP 0.40 0.37 +8 TransAmerica TA 1.85 1.74 +6 AirTouch ATI 0.26 0.25 +4 Mattel MAT 0.75 0.73 +3 Chevron CHV 0.62 1.11 -44 Varian Assoc. VAR 0.46 1.06 -57 Atlantic Richfield ARC 0.18 1.57 -89 Cybermedia CYBR -0.29 0.18 NM* Inktomi INKT -0.33 NA** NA** Newhall Land & Farming NHL 0.25 NA** NA** Provident Financial PROV 0.28 NA** NA**


* NM = not meaningful. A loss in any period makes percentage change not calculable.

Note: Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.

** NA = not available

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