The year-over-year comparison is affected by two nonrecurring items. Earnings in the first quarter of 2008 were boosted by a $3.7 million, or 12 cents per share gain on the sale of securities held for employee benefits. Earnings for the first quarter of 2009 were reduced by a $3.4 million, or 11 cents per share charge reflecting the 2008 portion of a rate refund recorded at Minnesota Power in response to a Minnesota Public Utilities Commission hearing.
ALLETE’s regulated operations earned $17.7 million in the first quarter, a decline of $2.4 million compared to the year-ago period. Higher interim retail electric rates and higher wholesale rates were more than offset by increased depreciation and interest expenses, and the aforementioned refund.
The Investments and other segment was $4.3 million lower than the first quarter of 2008, mainly due to the gain on the sale of investments in the employee benefit plans recorded last year.
In addition, earnings per share decreased by four cents compared to the first quarter of 2008 as a result of additional common shares outstanding in 2009.
During the first quarter, we essentially mitigated the impact of lower sales to our taconite customers by remarketing their available energy to other power suppliers, said Chairman, President and Chief Executive Officer Don Shippar. We have sales agreements in place that will offset about 85% of the current estimated financial impact from reduced industrial sales for 2009. We will continue our remarketing efforts and expense reduction activities with the goal of offsetting the remaining earnings impact.
Shippar said that ALLETE expects year-end earnings to be within a range of $2.10 to $2.25 on net income of $67 to $72 million, excluding the charge for the 2008 portion of the rate refund.
