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Pike Electric earnings rise despite lower revenue

November 7th, 2007 · No Comments

Pike Electric Co. (NYSE: PEC) of Mount Airy, N.C., on Tuesday reported higher first-quarter earnings despite a decline in revenues.

Total revenues for the quarter that ended Sept. 30, 2007, were $139.7 million, $10.2 million less than in the comparable quarter a year ago. Storm restoration revenues alone were down $7.5 million to $4.8 million for the first quarter of fiscal 2008. However, core powerline revenue (the company’s mainstay business) per billable hour increased 10.2 percent year over year, reflecting more favorable pricing from contract renegotiations and the elimination of certain accounts that did not meet the company’s profitability goals.

Gross profit for the quarter was $23.3 million, or 16.7 percent of revenue, a 17.9 percent increase from $19.7 million, or 13.2 percent of revenue, for the first quarter of fiscal 2007, primarily due to improvements in operational efficiency, the successful elimination of certain low-margin accounts, and the negotiation of more favorable pricing on contracts.

Net income for the first quarter of fiscal 2008 totaled $5.3 million, or $0.16 per diluted share, compared to net income of approximately $1.6 million, or $0.05 per diluted share, for the first quarter of fiscal 2007.

“Pike’s performance continues to benefit from our efforts over the past several quarters to improve our operations, as evidenced by our year-over-year gross profit margin improvement,” stated Chairman and CEO J. Eric Pike. “While our revenues were lower than last year due to our efforts to exit certain low-margin accounts during the latter half of fiscal 2007, along with significantly lower storm activity during this first fiscal quarter, we continue to focus on delivering consistent core powerline performance while maintaining industry-leading profitability levels.”

Pike continued, “One of our primary objectives over the next several quarters is to increase productive employee levels and implement initiatives that enable us to attract new hires while also investing in our long term employees. We remain confident that Pike Electric is well positioned to capitalize on the positive industry dynamics, to continue delivering quality service to our customers, and to add value to our shareholders over the long term.”

Based on current customer contracts and business conditions, for its fiscal year 2008, the company continues to expect core powerline revenues to range from $550 million to $560 million. The company expects total gross profit margins to be in the range of 16-17 percent.

Pike Electric hosted a conference call Tuesday to discuss financial results for its fiscal first quarter. A replay can be accessed by dialing (888) 203-1112. The passcode is 4988589. The replay will be available until Nov. 13.

Based in Surry County, Pike Electric is one of the largest providers of outsourced electric distribution and transmission services in the United States. Its core activities consist of the maintenance, upgrade and extension of electric distribution and sub-500 kilovolt transmission powerlines for more than 150 electric utilities, cooperatives and municipalities. Pike Electric services a contiguous 19-state region that stretches from Pennsylvania in the north to Florida in the southeast and Texas in the southwest and is a recognized leader in storm restoration services.

Tags: Businesses · Utilities

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