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TVA Reports Net Income of $54 Million in Second Quarter 2013
The Tennessee Valley Authority reported Friday net income of $54 million on operating revenues of $2.74 billion in the second quarter of 2013. This compares with a net loss of $94 million on operating revenues of $2.60 billion in the same period last year.
“We ended the second quarter 2013 essentially on plan,” President and CEO Bill Johnson said. “More normal weather had a favorable impact, as did employee efforts to reduce costs.
“We are focused on controllable factors that improve cost management and drive operational performance as we work to keep rates low. This is particularly important as we enter the summer months, when customer usage and sales typically are at the highest levels,” he said.
Sales to local power companies that distribute TVA electricity were 9 percent higher in the second quarter and 5 percent higher in the first six months of 2013, compared with the same periods last year. Higher off-system sales as a result of excess generation also contributed to higher sales. Offsetting these increases were lower sales to directly served industrial customers, TVA said in its quarterly filing to the U.S. Securities and Exchange Commission for the quarter ended March 31, 2013.
Total revenues increased 5 percent in the second quarter and 3 percent year to date, compared with the same periods last year. The increases were driven by higher fuel cost recovery due to higher fuel rates and an increase in electricity sales. Base revenue was $36 million higher in the second quarter due to an increase in electricity sales, but was down $49 million in the first six months of 2013 in part from a decrease in the effective base rate as distributors selected new wholesale rate structures.
Fuel expense was $148 million higher in the second quarter and $302 million higher in the first six months of 2013, compared with the same periods last year primarily due to more nuclear outages in 2013, which resulted in more generation from higher-cost sources, particularly natural gas and coal-fired generation.
“We were pleased to be able to hold our average power rates steady for customers, despite the increases in fuel and commodity costs,” Chief Financial Officer John Thomas said. “To further improve TVA’s power rates, we will continue developing a more balanced generation portfolio through effective asset management.”
Operating and maintenance expense increased by $13 million in the second quarter and was $52 million higher in the first half of this year compared with the same periods last year. During the first six months of 2013, TVA completed three nuclear refueling outages and a steam generator replacement project and began a fourth refueling outage, compared to one nuclear refueling outage in the same period last year.
For the six months ended March 31, 2013, TVA reported a net loss of $191 million on operating revenues of $5.32 billion, compared with a net loss of $267 million on operating revenues of $5.17 billion in the same period a year ago.
TVA executive management will host a second quarter fiscal year 2013 financial conference call at 9:30 a.m. EDT on Friday, May 3, 2013. The conference call can be accessed on TVA’s website via webcast at http://www.tva.com/finance. For quick access to the live conference call, please pre-register now by going to TVA’s website before the scheduled start time and follow the instructions provided. Once pre-registered, the dial-in number will be provided via an email. If you are unable to pre-register, you may access the conference call by dialing toll free (877) 270-2148 in the United States or in Canada, or (412) 902-6510 outside the United States. A replay will be available one hour after the end of the conference call until 5:00 p.m. EDT, May 13, 2013, by calling toll free (877) 344-7529 in the United States or (412) 317-0088 outside the United States and using the conference number 10026404. A webcast replay and transcript will also be available for one year on TVA’s website at http://www.tva.com/finance.
TVA’s quarterly report on Form 10-Q provides additional financial, operational and descriptive information, including unaudited financial statements for the quarter ended March 31, 2013, and is available to investors and the public. TVA SEC reports are also available without charge on TVA’s website at http://www.tva.com/finance or on the SEC’s website at http://www.sec.gov or by calling TVA toll free at (888) 882-4975.
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Last Update on July 30, 2014 07:27 GMT
TOKYO (AP) -- Asian stocks rose Wednesday ahead of U.S. economic data and as cheery earnings from major Japanese companies such as Honda Motor Co. countered a lower close on Wall Street.
Tokyo's Nikkei 225 recouped losses at the open to rise 0.3 percent to 15,662.84 in morning trading. The Hang Seng in Hong Kong, South Korea's Kospi and Sydney's S&P/ASX all gained ground.
Honda shares added 3 percent after a strong quarterly earnings report Tuesday, released after Tokyo stock trading closed, which prompted the Japanese automaker to raise its full year projections. The cheap yen is working as a plus for export manufacturers such as Honda, which are expanding sales in China and other emerging markets.
THE DAY AHEAD
WASHINGTON (AP) -- The Commerce Department later this morning will release the gross domestic product for the second quarter -- a report being closely watched in many quarters.
The economy shrank at a steep annual rate of 2.9 percent in the January-March quarter. Analysts said the harsh winter had contributed to the biggest contraction since the depths of the recession five years ago.
The policymakers of the Federal Reserve conclude a two-day meeting, and the central bank is not expected to announce any dramatic moves.
Among the quarterly earnings reports due today, Wellpoint Inc. and Goodyear Tire & Rubber will release results before the market opens and Whole Foods Markets Inc. reports its quarterly financial report after the market closes.
WASHINGTON (AP) -- Most analysts don't expect the Federal Reserve to make any major pronouncements or headlines when it ends a two-day meeting in Washington Wednesday.
Fed Chair Janet Yellen gave few hints about changes in the benchmark short-term interest rate or the Fed's enormous investment holdings when she testified to Congress this month. There will be a brief policy statement, but Yellen won't hold a news conference.
The Fed is expected to make a sixth $10 billion cut in its monthly bond purchases, which have been aimed at keeping long-term rates low.
Most analysts believe maintaining the status quo is likely because the economy needs less help now. Hiring is solid and manufacturing is strengthening. Consumers are voicing renewed confidence.
But because workers' pay remains flat and there is international uncertainty in Ukraine and the Mideast, there are potential threats. That likely means the Fed will leave its key short-term rate at a record low near zero "for a considerable time" after it ends its bond purchases.
WASHINGTON (AP) -- Analysts are upbeat about what the government is expected to announce Wednesday.
The Commerce Department will provide its first estimate of how much the gross domestic product -- the economy's total output of goods and services -- grew in the April-June quarter.
According to a survey of economists by the data firm FactSet, the economy expanded at an annual rate of 2.9 percent. That would be a warming trend compared to the January-March period when unusually severe weather was blamed for 2.9 percent contraction, the biggest since the depths of the recession five years ago.
Some forecasters are encouraged about the remainder of the year and predict a period of acceleration. They cite hiring gains, surging consumer confidence, a cutback in business stockpiling and a rebound in business capital spending on new equipment.
NEW YORK (AP) -- Stronger-than-expected financial results pushed Twitter's stock sharply higher on Tuesday after the short messaging service said its revenue more than doubled in the second quarter.
The San Francisco-based company's stock jumped 29.6 percent to $50.01 in extended trading after the results came out.
Twitter posted a net loss of $144.6 million, or 24 cents per share, in the April-June period. That compares with a loss of $42.2 million, or 32 cents per share, a year earlier when Twitter was still a private company.
Adjusted earnings were 2 cents per share in the latest quarter, beating analysts' expectations of a loss of 1 cent, according to FactSet.
Revenue was $312.2 million, up from $139.3 million.
NEW YORK (AP) -- Argentina's finance secretary and economy minister met with a court-appointed mediator as the South American nation worked into the night to prevent its second default in 13 years.
Minister Axel Kicillof arrived Tuesday evening at the Manhattan offices of a mediator appointed to try to strike a deal by midnight Wednesday.
U.S. District Judge Thomas P. Griesa last week ordered around-the-clock negotiations to avoid a default, but no face-to-face talks between negotiators for Argentina and bondholders had occurred by the time Argentina officials arrived Tuesday morning.
Argentina has blamed the judge for the crisis, saying his orders are forcing it into insolvency.
CRASH TESTS-SMALL CARS
DETROIT (AP) -- The four-door Mini Cooper Countryman was the only one of 12 cars to earn a top rating of "good" in new frontal crash tests.
The Nissan Leaf, Nissan Juke, Fiat 500L and Mazda5 wagon fared the worst in tests performed by the Insurance Institute for Highway Safety.
The frontal test, introduced in 2012, replicates what happens when 25 percent of a car's front end strikes a rigid object at 40 miles per hour.
The Chevrolet Volt, Ford C-Max, Mitsubishi Lancer, Scion FR-S and Subaru BRZ all got the second-highest rating of "acceptable." The Hyundai Veloster and Scion xB got "moderate" ratings.
The Volt was the only car in the group to earn the institute's "Top Safety Pick Plus" rating, because it has an optional front crash-prevention system
THOUSAND OAKS, Calif. (AP) -- Biologic drugmaker Amgen plans to lay off 12 percent to 15 percent of its worldwide workforce and close sites in Colorado and Washington state to fund investments, particularly launching new drugs.
The layoffs will happen this year and next, eliminating 2,400 to 2,900 jobs, mostly in the U.S. The announcement came even as the company reported second-quarter results that trounced Wall Street expectations.
Amgen said it will streamline the company, reduce management layers and reduce its real estate footprint by 23 percent.
The company based in Thousand Oaks, California anticipates charges of $775 million to $950 million, mostly in 2014 and 2015. It expects modest 2015 savings, but expense reductions in 2016 of about $700 million, versus 2013 spending. Most savings will be reinvested, including expanding operations in the biotech hubs of Cambridge, Massachusetts, and South San Francisco, California. The company manufactures Prolia for osteoporosis and anemia treatment Aranesp.
SIOUX FALLS, S.D. (AP) -- Three reporters for a food safety publication have been subpoenaed in the $1.2 billion defamation lawsuit against ABC related to the network's coverage of a meat product derided as "pink slime."
Court records show that the writers for the online Food Safety News have been asked to supply all communication they had with ABC in 2012.
Attorney Bruce Johnson said Tuesday the subpoenas were "overreaching" and that the publication would fight the requests.
Beef Products Inc. sued ABC in 2012 alleging that its reports led to plant closures and layoffs because it misled consumers into believing the product was unsafe. The industry describes the meat product as "lean, finely textured beef."
Attorneys for ABC and BPI have proposed a trial date in February 2017.
NEW YORK (AP) -- McDonald's is coming under intensifying pressure for labor practices at its U.S. restaurants.
The National Labor Relations Board said Tuesday that the world's biggest hamburger chain could be named as a joint employer in several complaints regarding worker rights at franchise-owned restaurants. The decision is pivotal because it could expose McDonald's Corp. to liability for management practices in those locations.
It also comes as protests for higher pay have captured national attention, with labor groups calling for pay of $15 an hour and the right to unionize. Organizers had been pushing to get McDonald's named as a joint employer at franchised restaurants, a move intended to give them a centralized and powerful target.
In the U.S., the vast majority of McDonald's more than 14,000 restaurants are owned and operated by franchisees. The same is true for many other fast-food chains, including Burger King and Yum Brands, which owns Taco Bell, KFC and Pizza hut. As such, the companies have sought to distance themselves from the pay protests by saying they don't determine wages.
DETROIT (AP) -- A trial to determine if Detroit gets out of bankruptcy has been delayed by a week to Aug. 21.
Judge Steven Rhodes filed a new schedule Tuesday. Some creditors wanted a longer postponement, but he settled on seven days. Rhodes found "extraordinary cause" for "limited adjournments."
It's the second delay in the historic case. The trial was first scheduled for July, a year after Detroit filed for protection under Chapter 9.
Detroit's plan to erase or greatly reduce $18 billion in debt has been approved by many creditors, including thousands of retirees. But nothing will happen unless the judge finds that the overall strategy is fair and feasible.
The greatest resistance is coming from bond insurers who stand to lose millions. The trial likely will last weeks.
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