Westar 3Q Earnings Climb 21 Percent
Nov. 11, 2002
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TOPEKA, Kan. (AP) _ Westar Energy Inc., which state regulators have ordered to reorganize, on Monday reported a 21 percent increase in its third-quarter earnings, due in part to hot September weather.
The company said it earned $43.6 million during the quarter ended Sept. 30, or 61 cents per share, compared with $36 million, or 51 cents per share, during the third quarter of 2001.
Westar, the state's largest electric company, took a one-time charge of 27 cents per share. The charge, announced in September, reflects how accounting rules apply to $400 million of the company's more than $3 billion debt.
Sales totaled $529.1 million, compared with $513.5 million in the year-earlier period.
Westar said its utility operations reported revenues of $442 million, up from $418 million in the year-earlier quarter, partly because of an increase in residential revenues as a result of hot September weather.
The Kansas Corporation Commission on Friday ordered Westar to reorganize, saying they wanted to protect electric consumers from risks associated with the company's non-utility business interests.
Westar provides service to about 647,000 customers in Kansas. Its non-utility interests include an 88 percent ownership stake in the Protection One security alarm company, which critics argue is a drain on Westar's finances.
The commission also said Westar needs to reduce its debt. Westar officials have said repeatedly their goal is to do so, but they and their critics have disagreed over a variety of financial and management issues.
``Clearly, the company needs to pay off a significant amount of debt,'' said Barbara Eiseman, an analyst for Standard & Poor's rating service. ``Westar's problems stem from its huge, debt-financed acquisition of the monitored security business.''
S&P said Monday it's unclear how Westar will separate its utility and non-utility operations, but any plan that reduces its debt will improve its ``frail'' financial condition.
Shares in Westar rose 23 cents to close Monday at $9.40 each on the New York Stock Exchange, continuing their rebound. The shares had plunged Thursday after Westar's top executive was indicted along with a former Topeka bank president, accused of hiding the purpose of a $1.5 million loan.
Authorities said there was no indication the charges involved Westar's business matters.
The charges against David Wittig, Westar's chairman, president and chief executive officer, include submitting false entries, conspiracy and money laundering. The same charges were lodged against Clinton Odell Weidner II, 49, the former president of the Capital City Bank.
The indictment alleges a transaction in April 2001 was designed to funnel $1.5 million of bank funds through Wittig to an Arizona real estate development project so Weidner could obtain a 50 percent interest in it. The indictment also accused the pair of filing misleading documents with the bank to conceal the intent of the loan.
Wittig asked to be placed on administrative leave so that he can concentrate on defending himself, his attorney and the company said.
Westar promised to appoint an acting president and chief executive soon.
For the first nine months of the year, Westar posted a loss of $693.7 million, or $9.71 per share, hurt by accounting charges of $11.14 per share. For the first nine months of 2001, the company had earned $10.2 million, or 13 cents per share. Sales for the year to date totaled $1.35 billion, up about $7 million, or 0.5 percent, from a year earlier.
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Westar Energy: http://www.wr.com