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Energy company Dominion Resources' 3Q profit falls

MICHAEL FELBERBAUM, AP Business Writer
Thursday, 25 Oct 2012 | 8:59 AM ET

RICHMOND, Va. -- Dominion Resources says its third-quarter net income tumbled nearly 47 percent because of costs related to the permanent shutdown of one of its nuclear power stations and plant outages.

Mild weather also drove down electricity use, according to the Richmond, Va., energy provider, which reported earnings of $209 million, or 36 cents per share, for the three months ended Sept. 30. That's down from $392 million, or 69 cents, a year ago.

Operating earnings fell about 3 percent to 92 cents per share. Dominion uses operating earnings that exclude certain items as its primary performance measurement.

The company recorded $297 million in charges from the planned shutdown of its Kewaunee nuclear power plant in Wisconsin, $45 million in net losses for three power plants in the Midwest and the Northeast that it decided to market for sale during the quarter, as well as $42 million in restoration costs from the late June storms that knocked out power to more than 1 million customers.

Revenue fell about 9 percent to $3.41 billion from $3.75 billion a year ago.

Analysts polled by Fact Set expected 97 cents per share on revenue of $3.66 billion.

Company shares fell 63 cents, or 1.2 percent, to $51.82 in afternoon trading. Its shares are 7 percent below their 52-week high of $55.62 set in early August.

During the quarter, Dominion's natural gas transportation subsidiary placed its Appalachian Gateway project, a pipeline between West Virginia and Pennsylvania, into service. The project will allow for the delivery of 484,260 dekatherms per day of natural gas produced in the region, it said.

Work continues on a large gas processing plant in the Marcellus and Utica shale regions that is expected to be in service by late 2012.

The company also said Thursday that its Dominion East Ohio subsidiary entered into a long-term agreement to provide services wet gas in northeastern Ohio using existing pipeline assets. The project is expected to come online in early 2014.

Construction is proceeding on a 1,329-megawatt gas-fired combined cycle plant in Warren County and is on schedule to start operating in late 2014, the company said. Plans also are moving forward for a similar facility in Brunswick County. Conversions from coal to biomass at several of its power stations are under way.

The company said it expects to report fourth-quarter operating earnings of 65 cents to 75 cents per share. Wall Street had been looking for 71 cents, but the average estimate dropped by a penny Thursday.

Dominion Resources Inc. is one of the nation's largest producers and transporters of energy and has the nation's largest natural gas storage system. It serves retail customers in 15 states.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.

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