Sierra Pacific Posts $172 Million Net Quarterly Loss

By  | 

Sierra Pacific Resources, struggling to regain its financial footing after the 2001 energy crisis, reported Friday that its second quarter losses deepened to $172.4 million, or $1.48 a share.

The financial statement for the three-month period ending June 30 compares with losses of $41 million, or 41 cents a share, for the same quarter a year ago.

Revenues totaled $666.6 million for the quarter, down from $700.5 million for the same period last year.

Operating income amounted to $15 million, down $5 million from the second quarter in 2002, the company said.

Company officials said losses this quarter included one-time write-offs, including disallowed deferred energy costs totaling $91 million for its subsidiaries Nevada Power Co. and Sierra Pacific Power Co. The Reno-based parent firm took a $33 million write-off for the bankruptcy filing of a communications subsidiary.

Also included was a $123 million unrealized loss to the parent firm associated with $300 million in convertible notes issued by the company in February to restructure debt, officials said.

At a special meeting scheduled Monday, shareholders will vote on whether to approve issuing up to 42.9 million additional shares of common stock to cover the cash portion of the conversion price, officials said.

If shareholders reject the plan, the company has said it would be forced to pay bond holders the value of the stock in cash, something that could further jeopardize Sierra's financial stability.

Net loss for the first six months of the year amounted to $190 million, or $1.66 per share, compared with a loss of $347 million, or $3.40 per share, for the same period in 2002, the company reported.

At midday, Sierra Pacific stock was trading at $4.82 a share on the New York Stock Exchange, down 16 cents from Thursday's closing price.

Sierra Pacific has blamed much of its financial troubles on an energy crisis in 2001 when it says it was forced to purchase power on the volatile market at exorbitant prices. State regulators later disallowed the power companies'requests to recoup much of those cost from customers.

"We're doing everything on our power to put the effect and aftereffect of the 2000-2001 energy crisis behind us,"Walter Higgins, Sierra Pacific Resources president and chief executive, said during a conference call with analysts.

In June, the Federal Energy Regulatory Commission denied Sierra Pacific's request to invalidate about $290 million in long-term energy contracts the company signed during the height of the energy crisis.

Last month, the company asked the commission for a rehearing.

"We're prepared to fight if necessary, all the way through the court system to the Supreme Court,"Higgins said.

Sierra Pacific Resources was formed in 1999 by the merger of Reno-based Sierra Pacific Power and Nevada Power headquartered in Las Vegas. It supplies electricity to 954,000 customers over a 55,000-square-mile area in Nevada and the eastern Sierra and natural gas to 119,500 people in the Reno-Sparks area.


On the Net: Sierra Pacific Resources: