Wisconsin Energy shares fall on lowered outlook

MILWAUKEE - Shares of electric and natural gas utility Wisconsin Energy Corp. fell on Friday after the company's 2009 earnings estimates fell short of Wall Street expectations.

Wisconsin Energy shares fell $1.73, or 4.2 percent, to $39.63 in midday trading. The 52-week share price range is $34.89 and $50.48.

The company on Thursday predicted earnings for 2008 of $2.90 per share and for 2009 between $3.05 and $3.15 per share, citing an expected 6 percent decline in 2009 sales to large commercial and industrial customers. Sales to small commercial and industrial customers are projected to drop nearly 2.5 percent next year as the recession takes its toll on economic activity.

Analysts polled by Thomson Reuters forecast earnings per share for 2008 at $2.89, and for 2009 at $3.18, on average.

The company also changed its dividend policy. The new policy sets a dividend payout ratio between 40 and 45 percent of earnings in each year from 2009 to 2011, compared to an earlier policy that called for annual increases at about half the rate of earnings growth.

For the first quarter of 2009, the company said it would raise the quarterly dividend to 33.75 cents per share, an increase of 6.75 cents, or 25 percent, over the current quarterly rate.

Maurice May, an analyst with Soleil Securities Group, said the new policy is a "little more conservatively than we had expected." Based on the change and the company's earnings outlook, May held Wisconsin Energy's rating at "Buy," but lowered its price target to $45.50, from $47, reflecting Thursday's "volatile trading."

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