NSTAR profit again outpaces revenue

BOSTON – Electrical and natural gas utility NSTAR Inc. (NYSE: NST) saw its profit rise 7.2 percent last year, outpacing the 7.1-percent gain it recorded for 2007, as its ongoing cost-cutting campaign continued to pay off.
For all of 2008, the company posted a profit of $237.55 million – up from $221.51 million the year before (READ MORE) – on annual revenue that rose 2.6 percent to nearly $3.35 billion, based on preliminary financial data released today.
Earnings per diluted share rose to $2.22 from the year-ago $2.07. That fulfilled NSTAR’s November prediction that annual earnings would fall “in the upper half of its $2.16 per share to $2.26 per share earnings range.” (READ MORE)
The company last year paid dividends of $1.40 per common share, a 7.7-percent increase from the $1.30 per share it paid in 2007.
“2008 was a solid year for NSTAR, from both an operational and financial perspective,” said Chairman, President and CEO Thomas J. May.
“Our service-quality measures for the year were again at high levels as we continue to focus our efforts on excellent system reliability. Our service-quality metrics related to billing, meter-reading and call-center performance were very positive, exceeding our 2007 results.
“In addition, the second phase of our 345 kilovolt (kV) transmission project was energized in December, four months ahead of schedule and under budget. This marks the completion of construction of what now is the largest underground 345kV transmission line of its type in the country. The line will serve to improve the region’s reliability, while also reducing energy costs to customers,” May said.
“I’m also proud of the disciplined cost control implemented by NSTAR employees over the last several years, [which] has helped the company maintain its strong credit profile. Our healthy credit ratings and positive cash flow have provided NSTAR with uninterrupted access to the credit markets and substantially lowered our borrowing costs during a very volatile period in the financial markets.”
For the three months ended Dec. 31, NSTAR posted a profit of $42.12 million – a 6.9-percent increase from the 2007 fourth quarter’s $39.40 million – on revenue that rose 8.9 percent to $813.88 million.
Quarterly earnings per diluted share rose to 39 cents from the year-ago 37 cents, despite a 1.6-percent decline in fourth-quarter electrical sales. “This increase reflects the positive impact of higher transmission revenues and a decline in interest costs,” said the company report.
NSTAR recorded fourth-quarter dividends of 35 cents per common share, a 7.7-percent increase from the 32.5 cents per share of the year-ago period.
The company today reaffirmed its 2009 earnings guidance of $2.33 to $2.43 per diluted share. Its report predicted that sales of natural gas will be “flat” this year but electrical sales will increase about 1 percent; operations and maintenance costs will fall 2 percent, as the company continues its cost-control drive; and capital spending will total about $365 million in 2009.
NSTAR Inc. (NYSE: NST) is an investor-owned natural gas and electric utility, with some non-utility operations, that posted assets of about $3.3 billion as of Dec. 31. It serves about 1.1 million electric and 300,000 natural gas customers in New Bedford, Dartmouth, Fairhaven and other portions of eastern and central Massachusetts. Additional information is available at www.nstar.com.