SAN FRANCISCO >> PG&E said Tuesday its profits jumped during the first quarter of 2017, a surge for the embattled utility’s bottom line that coincided with spikes in gas bills for many customers during a harsh winter.
During the January-through-March quarter, PG&E captured $576 million in profits, which were five times the earnings that it harvested during the year-ago first quarter.
“Our results for the quarter reflect PG&E’s strong focus on making the investments in our system that will drive further progress on safety, reliability and achieving California’s clean energy goals,” said Geisha Williams, PG&E’s chief executive officer.
Per-share operating profits that excluded certain one-time items were $1.06 a share, which easily topped Wall Street’s prediction of 81 cents. Operating profits totaled $544 million, up 33.7 percent from a year ago.
Revenue totaled $4.27 billion, a 7.4 percent increase from the same quarter a year ago.
San Francisco-based PG&E, which is a convicted felon after being sentenced on six charges for crimes the utility committed before and after a fatal explosion in San Bruno, is seeking to burnish its image in the wake of the disaster in September 2010 that killed eight people.
So far in 2017, PG&E shares are up 8.9 percent, a gain that has outpaced the S&P 500 Utilities Index, which is up about 5.7 percent this year. PG&E’s stock slipped slightly on Tuesday.
Electricity revenue totaled $3.07 billion in the first quarter, a 2.1 percent decrease from the similar period in 2016. Gas revenue in the first three months of 2017 totaled $1.2 billion, which represented a huge jump of 42.7 percent from gas revenue a year ago.
Numerous customers have complained about big increases in their gas bills during the winter, some saying that their monthly costs soared by hundreds of dollars compared to what they normally pay.
“Running the business cost effectively and affordably for customers” are among the key goals for PG&E, Williams said.
During a conference call with analysts to discuss the results on Tuesday, Williams asserted that the company will continue to seek ways to slash costs.
“We are really focused on affordability, and part and parcel of that is our cost structure,” Williams told the analysts.
In the recent past, those cost reductions have included job cuts.
In January, PG&E announced plans to eventually eliminate 450 jobs, although the net effect was expected to be a loss of 390 positions after an estimated 60 workers were transferred to other positions within the company. In March, PG&E cut 132 jobs in San Francisco, where it is headquartered, it said in documents filed with the state Employment Development Department. It cut another 112 jobs in the East Bay, including 94 in San Ramon.
“We are on a journey to continue to drop costs out of our business,” Williams said during the conference call. “You can expect to see more of that in the years to come.”
Customers can also expect even higher power bills in the years to come, the utility stated and analysts suggested.
“There are potential rate base increases” in the works for PG&E customers, Jason Wells, PG&E’s chief financial officer told the analysts.
These rate increases are in the works due to pending decisions on state regulatory proceedings related to a general rate case for electricity and gas bills and a gas transmission and storage case, and a separate matter before federal regulators regarding electricity transmission rates.
Higher monthly bills are among the factors that will help PG&E fatten its profits, an analyst said.
“We see strong capital spending, rate increases and cost control efforts helping to drive profit growth,” Christopher Muir, an analyst with CFRA Research, stated in a note about the PG&E financial results.
