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Pike Electric holds profits steady despite lower revenue

February 6th, 2008 · No Comments

Pike Electric Corp. (NYSE: PEC) of Mount Airy posted second-quarter gross profits of $24.5 million — identical to those in the second quarter that ended Dec. 31, 2006 — despite lower revenue.

Second-quarter 2008 revenues were $143.1 million, compared to $148.4 million in the second quarter of fiscal 2007. Core powerline revenues for the second quarter of fiscal 2008 were $123.5 million, down $10.8 million from a year earlier. Storm restoration revenues totaled $19.6 million, an increase of $5.5 million from the second quarter of fiscal 2007 because winter storms slammed Midwest and Mid-Atlantic regions in November and December.

Despite the lower revenue, Pike Electric said it increased powerline revenue per billable hour by 7.1 percent, year over year; eliminated some low-margin accounts; and improved operational efficiency. As a result, gross profit for the second quarter of fiscal 2008 was 17.1 percent of revenue, compared to 16.5 percent of revenue in the second quarter of fiscal 2007. The company said it also reduced legal, accounting and interest expenses in the quarter. Pike Electric reduced total debt by $24 million during the first six months of fiscal 2008.

Net income for the fiscal 2008’s second quarter totaled $5.1 million, or $0.15 per diluted share, compared to net income of $5.2 million, or $0.16 per diluted share, for the second quarter of fiscal 2007.

J. Eric Pike, chairman and CEO, said, “Our primary goal is to deliver consistent core powerline performance over the long term, while maintaining industry-leading profitability levels. While we expect growth in the near term to remain moderate in light of the difficult economic conditions, we remain focused on capturing profitable business and building the capacity and quality of our workforce. Solid industry fundamentals continue to support long-term demand for maintenance and upgrades to the distribution and transmission network. With the right people in place, we believe we will be well positioned to capitalize on our customers’ growth over the coming years.”

Through the first half of 2008, Pike Electric had gross profit totaling $47.7 million, compared to $44.3 million for the same period in fiscal 2007, and $10.4 million in net income, or $0.31 per diluted share, compared to $6.8 million, or $0.21 per diluted share, for the first six months of fiscal 2007.

Based on a challenging economic environment and current market conditions, the company now expects fiscal year 2008 core powerline revenues to range from $520 million to $530 million, down from its prior expectation of $550 million to $560 million. The company continues to expect total gross profit margins to be in the range of 16-17 percent.

Pike Electric hosted a conference call to discuss financial results for its fiscal second quarter. A replay can be accessed by dialing (888) 203- 1112. The passcode is 1944477. The replay will be available until Feb. 12.

Pike Electric is one of the largest providers of outsourced electric distribution and transmission services in the United States. From its headquarters in Surry County, N.C., 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.

Tags: Businesses

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