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Katharine Lau/Medill

Integrys Energy Group Inc. reports slight decrease in net income

by Katharine Lau
Feb 26, 2010

Integrys Energy Group Inc., a regulated electric and natural gas utility company, reported a slight decrease in profit for the fourth quarter of 2009, failing to meet analysts’ expectations.

The Chicago-based utility company earned $23.5 million attributable to common shareholders, or 31 cents per diluted common share, in the quarter ended Dec. 31. This represents an 8.2 percent decline from the year-earlier quarter of $25.6 million attributable to common shareholders, or 33 cents per diluted common share. Integrys failed to meet analysts’ quarterly estimates of 48 cents, as compiled by Zacks Investment Research Inc.

Sales totaled $1.6 billion, down 54 percent from $3.4 billion in the year-earlier quarter, due to a major divestiture in the third quarter.

“Last year, 2009, was a difficult year for many companies and a lot of our customers,” said Joseph O’Leary, Integrys chief financial officer, in a conference call Friday, “and we did not escape the impact of a tough economy, nor did we expect to.”

Integrys’s continuing “repositioning of its businesses" in 2010, though, led David Parker, an analyst with Robert W. Baird & Co. Inc. in Tampa, Fla., to maintain his “neutral” rating on the company's stock.

“Solid 2009 fourth quarter earnings per share and authorized rate relief we believe well positions [Integrys] to complete its business strategy retooling resulting in a substantial earnings per share rebound for core operations which could eventually support a higher target price,” Parker wrote in a note Friday.

For all of 2009, the company reported a loss attributable to common shareholders swung of $70.9 million, or 92 cents per diluted common share, compared with a profit of $126.4 million, or $1.64 per diluted common share, in 2008. The loss was primarily due to goodwill impairment losses of $291.1 million and restructuring expenses of $43.5 million, as its nonregulated subsidiary, Integrys Energy Services Inc., sold its wholesale natural gas marketing business.

Total sales for the year ended Dec. 31 fell 46.6 percent to $7.5 billion from $14.0 billion.

Integrys shares closed Friday at $44.08, down 73 cents or 1.6 percent from Thursday’s closing price of $44.81.