CMS Energy 1st-qtr profit halved by warm weather

The Associated Press

JACKSON, Mich. (AP) — CMS Energy Corp. on Thursday reported that its profit fell by half in the first quarter, as a warm Michigan winter cut heating demand for the company's customers.

CMS reported Thursday it earned $67 million, or 25 cents per share, on revenue of $1.74 billion in the first quarter. Last year, the company earned $135 million, or 52 cents per share, on revenue of $2.06 billion.

The utility earned 37 cents per share when the effect of a regulatory change and other items were removed from results.

Analysts, on average, expected the company to earn 40 cents per share on $1.42 billion in revenue.

The first three months of 2012 have been the warmest on record nationwide, according to the National Oceanic and Atmospheric Administration. Homes and businesses needed less natural gas, electricity and heating oil to stay warm.

The warmer weather cost CMS, which delivers electricity and natural gas to 6.5 million customers in Michigan, 13 cents per share in the quarter. President and CEO John Russell said the company has identified a number of options to offset the impact of the unusual season, and is in the process of making those cost-cutting moves. These efforts will be in addition to previously planned cuts expected to reduce costs by 4 percent this year and 1 percent each year through 2016, he said.

The company also took a $36 million charge associated with Michigan's adoption of a regulatory structure known as decoupling. The structure separates a utility's revenue from the amount of electricity or gas it delivers to customers. That way, the utility has a greater incentive to push energy efficiency measures because it won't lose revenue by helping customers cut their usage.

CMS Energy backed its prior guidance for full-year adjusted profit of $1.52 to $1.55 per share. Wall Street, on average, expects $1.54 per share, with estimates ranging from $1.51 to $1.60.

Shares of CMS Energy added 33 cents, to $22.65 in afternoon trading, after earlier hitting a 52-week high of $22.71. The stock has traded as low as $16.96 in the past year.