Refund charge hurts Hawaiian Electric net
Hawaiian Electric Industries Inc. said yesterday that its third-quarter earnings were "significantly impacted" by a $15 million refund to Oahu electric customers.
Earnings for the state's largest utility provider dropped 38 percent in the quarter ending Sept. 30, stemming from an amended proposed decision on Hawaiian Electric Co.'s rate case. The utility announced the one-time refund, which amounts to $17 for a residential household using 600 kilowatt-hours a month, last week.
The company posted net income of $19.9 million, or 24 cents a share, compared with $32.3 million, or 40 cents, a year earlier. The refund drove down earnings by $8.3 million, or 10 cents a share, after taxes are deducted, HEI said.
D.A. Davidson & Co. analyst James Bellessa forecast earnings of 23 cents a share including the charge.
Revenue declined $433,000 to $673.5 million in the quarter.
Profit for HECO dropped 46 percent to $12.9 million from $23.7 million after the utility set aside reserves for the potential rate case refund. An increase in generating station maintenance and the number of unit overhauls pushed operating and maintenance expenses up 1 percent to $541 million from $536 million a year earlier.
Kilowatt-hour sales in the quarter remained flat at $2.6 million, as lower consumption by large commercial customers was partially offset by new load growth and warmer weather, the company said.
Income for HEI's American Savings Bank unit fell 12.9 percent to $11.7 million from $13.5 million a year earlier. The bank increased its loan loss provision by $2.7 million on expenses related to a single commercial borrower, compared to no provision in the third quarter of 2006. Results were also impacted by increased funding costs because of a shift from lower costing deposit accounts to higher costing CDs and other borrowings, Constance Lau, HEI's president and chief executive officer, said in a statement.
Net interest income, which reflects the difference of what the bank pays depositors and what it brings in from loans, fell 3 percent to $47.7 million from $49.2 million. Net interest margin narrowed to 3.01 percent from 3.10 percent last year.
Noninterest income which includes revenue from service charges and fees, increased 10.5 percent to $11.7 million from $13.5 million. Noninterest expenses fell to $43.7 million from $44.2 million.