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Following energy issues in the state of Connecticut and beyond.

Thursday, February 24, 2011

Evidence That Some of Us Are No Longer in a Recession

Need any evidence that the recession continues to hit some segments of our economy unequally?

Then check out Northeast Utilities latest earnings report, hot of the presses Thursday afternoon. Hartford-based NU saw its fourth quarter profits increase by 52 percent in 2010, while its full year earnings were up 17.5 percent over 2009.

NU, the parent company of Connecticut Light & Power, said Thursday that it earned $129.3 million or 73 cents per share in the fourth quarter compared to $84.7 million or 48 cents per share during the same period last year. Full year earnings increased from $330 million or $1.91 per share in 2009 to $387.9 million or $2.19 per share last year, company officials said.

"We are pleased with the performance we delivered to our customers and shareholders in 2010," Charles Shivery, NU’s chairman, president and chief executive officer, said in a statement. "Our financial performance improved over 2009 due in part to strong cost controls."

Shivery (who is pictured above) went on to say that the company's impressive earnings performance came even as energy rates paid by customers of NU's subsidiary utilities continued to decrease and at a time when approximately $1 billion was invested in strengthening and expanding its energy infrastructure in Connecticut, Massachusetts and New Hampshire.

Spending that kind of money on infrastructure improvements at a time when energy rates are going down doesn't begin to explain the company's double digit profit increases or why NU's stock hit a 52-week high earlier this month. But since Shivery didn't make himself available for comment so he could offer a more nuanced explanation of the company's performance, the reporting of your humble energy writer will have to do for now.

One reason for the earnings growth is that it came across all of NU's business segments and through all of its subsidiaries.

The company’s distribution and generation segment saw earnings increase by nearly 93 percent from $39.2 million in the final three months of 2009 to $75.5 million during the same period in 2010. During all of 2010, the company earned $206.2 million in that business segment, compared to $159.2 million in 2009.

Yankee Gas Services Co. saw its fourth quarter earnings more than double, bringing in $16.6 million in the fourth quarter of 2010, compared with $5.7 million during the same period in 2009. Full year earnings in 2010 rose nearly 56 percent to $32.7 million, compared with $21 million in 2009.

NU’s earnings were released after the close of trading in U.S. financial markets. Shares of NU’s stock trade on the New York Stock Exchange and closed at $33.17, down 13 cents from the previous day’s trading.

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