Milwaukee-based WEC Energy Group today reported third quarter net income of $215.4 million, or 68 cents per share, down from $217 million, or 68 cents per share, in the third quarter of 2016. The third quarter of 2016 included $3.5 million in acquisition costs that reduced EPS by one cent.
WEC attributed the earnings decline to cooler summer temperatures in 2017.
Operating income was $393.6 million, down from $399 million in the third quarter of 2016. Revenue in the third quarter was $1.7 billion, flat from 2016.
WEC increased its utilities customer base year-over-year, with an additional 9,000 electric and 18,000 natural gas customers in the third quarter versus the year-ago quarter.
In the first nine months of the year, retail electricity delivery was down 2.5 percent, residential electricity use declined by 4.6 percent and small commercial and industrial electricity use was down 2.3 percent. Large commercial and industrial customer electricity use declined 0.9 percent during the period. All of the declines were due to the cooler summer, the company said, but on a weather normal basis retail deliveries would still have declined 0.5 percent due to energy efficiency initiatives.
“Our continued focus on cost control was a major factor in our solid third-quarter results,” said Gale Klappa, chairman of the board and interim chief executive officer. “Moving forward, we will continue to gain efficiencies across our generating fleet and our seven operating utilities.”
Klappa has been serving in the interim role since CEO Allen Leverett suffered a stroke earlier this month.
“I can tell you that Allen has been released from the hospital and is making progress in his recovery,” Klappa said in a call with analysts this afternoon. “I will continue to serve as president and CEO for as long as necessary, but the ultimate goal is bringing Allen back.”
Klappa also gave an update on the Peoples Gas project WEC has taken on in Chicago. In response to criticism of the natural gas infrastructure construction project, WEC has reduced contractor costs by 15 percent, customer complaints by 70 percent and has accelerated the project timeline, he said.
And Klappa described the expected windfall for WEC from the Foxconn Technology Group manufacturing facility, which is expected to use about 200 megawatts of electricity–about three times more than the next largest Wisconsin WEC customer. He said WEC will be capable of supplying the energy, and that it won’t have to build any new infrastructure since Foxconn is situated ideally in its transmission network.
With six utilities serving 4.4 million electric and natural gas customers in four states, WEC Energy Group is one of the largest utilities – and one of the largest corporations – in the country. It has about $30 billion in assets, 8,500 employees and 55,000 stockholders of record.
