Avista's net income increases in 2010

Avista Corp. on Thursday reported a solid year in 2010 with net income of $92.4 million, which is up $5.3 million compared with the year earlier.

Avista also had a positive fourth quarter, with net income of $25.7 million, which bested 2009 by $3.6 million. Earnings per share were up for the year and quarter. It reported earnings per share of $1.65 for the year, compared with $1.58 in 2009.

Scott Morris, Avista chairman, president and chief executive officer, said modest growth in the company’s overall earnings as compared with 2009 was primarily due to an increase in earnings at Advantage IQ and a decrease in the net loss from businesses in Avista’s other business segment.

Advantage IQ had net income of $7.4 million in 2010, compared with $5.3 million the year before. Total revenues for the year for Advantage IQ were $102 million.

An overall loss by Avista’s other smaller ancillary companies, such as METALfx, in California, shrunk to $1.7 million, compared with a loss of $5 million in 2009.

For Avista Utilities, 2010 electric revenues increased $133.5 million. Retail revenues from electric service decreased by $20.6 million due to a decline in use per customer as a result of warmer weather in the heating season.

Natural gas revenues decreased $43.2 million for 2010 as compared with the year earlier.

Retail natural gas revenues decreased by $98.3 million. The decrease in retail natural gas revenues was due to lower retail rates and a decrease in volume. Less natural gas was sold in 2010 primarily due to warmer weather compared with 2009.

This year, Avista said its earnings growth will continue to be limited by slow load growth (use of electricity and natural gas by customers) due to the economy. Avista also anticipates a lag in the recovery of its costs, and increased operating expenses.

James Bellessa Jr., an analyst for D.A. Davidson and Co., issued a report Thursday lowering his earnings forecast for Avista to $1.70 per share from $1.80 because of the slow load growth and continuing regulatory lag in recovering operating costs. He also reduced his 2012 earnings per share forecast.

Avista’s outlook for 2011 is for consolidated earnings per share to be in the range of $1.60 to $1.80.

The company said it expected to issue up to $25 million of common stock in 2011 in order to finance a portion of its capital expenditures, while maintaining its capital structure at an appropriate level for its business.

General rate increases went into effect in Idaho on Oct. 1, and in Washington on Dec. 1. This month, Avista filed an all-party settlement in its Oregon general rate case. If approved by the Oregon commission, rate increases would go into effect in March and June of this year.

To assist customers in the challenging economic times, Morris said Avista increased its charitable donations by more than $2 million compared with 2009. The donations came from company profits and were not paid for by customers in rates, he said.