's utility operationsresulted in slightly improved financials during the first quarter, when excludingimpacts from warmer winter weather and compared with the same time last year, accordingto company Chairman, President and CEO Carl Chapman.
Risingreturns on both the company's Indiana and Ohio gas infrastructure replacement programswere the primary driver of the improved results, Chapman said on the company's earningsconference call May 10.
Vectren'snonutility group reported record first-quarter revenues, partly due to several projectsbeing finished and "continued favorable market conditions in both the federaland public sectors," Chapman said. Additionally, the company's distributionbusiness "capitalized on strong demand fromits customers for pipeline repair and replacement work," he noted. "This,along with more favorable construction weather in the quarter compared to last year,improved operating results to start the year in 2016."
Vectrennarrowed its annual earningsguidance May 9 after first-quarter 2016 net income dropped to $48.3 million, or58 cents per share, from $57.0 million, or 69 cents per share, in the first quarterof 2015. The company's 2016 EPS guidance range now stands at $2.45 to $2.55 as opposedto $2.45 to $2.65 previously. The utility group is expected to contribute $2.00to $2.05 toward 2016 EPS, while the nonutility group is expected to contribute 45cents to 50 cents.
The utilitygroup booked $61.1 million, or 74 cents per share, in first-quarter earnings, downslightly from $63.0 million, or 76 cents per share, in the opening months of 2015.The earnings were offset by a first-quarter 2016 loss at the nonutility group thatwidened to $12.7 million, or 16 cents per share, from $5.9 million, or 7 cents pershare, in the same quarter of 2015. Vectren's 2016 first quarter was marked by adrop in operating revenues: $584.8 million versus $706.2 million in the first threemonths of 2015.
On theelectric side, the Indiana Utility Regulatory Commission in March approvedsubsidiary 's2016 and 2017 electric energy efficiency programs,CFO and Senior Vice PresidentSusan Hardwick said on the call. The company does business in the state as Vectren Energy Delivery of IndianaInc. "The order provides for cost recovery of program andadministrative expenses and includes performance incentives for reaching energysavings goals," Hardwick said.
In early April, the company conducted its first stakeholder meetingon its upcoming integrated resource plan, according to Hardwick. Each electric utilityin Indiana is required to submit an IRP every two years. "We believethe first stakeholder meeting was productive and look forward to gathering moreinput during our second meeting in July," Hardwick said, adding that the IRPis expected to be complete later in 2016.