By the OGJ Online Staff
HOUSTON, Jan. 8 -- Stock in CMS Energy Corp. opened 3.74% lower Tuesday after the Dearborn, Mich., energy holding company Monday said 2001 earnings would be about 35¢/share below previous projections.
Shares in CMS were down 92¢/share at the open Tuesday, after closing at $24.62 Monday. The company reported after the market closed Monday, operating earnings for this year will be $1.35-$1.40/share. The Thomson/First Call consensus estimate was $1.79/share.
CMS blamed "significantly" warmer than normal fourth quarter weather that affected its Michigan gas distribution utility, lower gas and electric sales due to the economic slowdown, additional electric generating plant maintenance costs, and increased electric distribution repair costs due to storm damage. Michigan's weather in the fourth quarter was the second warmest since recording of temperatures began in 1864, CMS said.
Contrary to expectations, CMS Energy said there were no earnings gains from the sale of its CMS Trunkline LNG business. As part of a major restructuring, the company sold the LNG business in late December for $320 million. The net proceeds were used to repay debt, including $200 million of Panhandle Eastern Pipe Line Co. long-term debt.
With the Jan. 3, 2002, close of the sale of its assets in Equatorial Guinea for $993 million, the company retired all bank debt of CMS Oil & Gas Co. totaling $110 million; all CMS Energy's short-term bank debt totaling $215 million; and all of Consumers Energy's short-term bank debt totaling $409 million.
In addition, the company called $125 million of debt related to the Atlantic Methanol Production facility and injected $150 million of equity into Consumers Energy.
Repairs have been completed at the Palisades nuclear plant and plant start-up preparations are on schedule for a late January return to operation.
The Michigan Public Service Commission authorized an interim natural gas rate increase for Consumers Energy's natural gas utility of $15.4 million annually, effective Dec. 21, 2001. The commission is expected to rule on final rate relief in the second quarter of 2002.
CMS Energy reaffirmed its 2002 outlook of $2-$2.05/share earnings, excluding any asset sale gains or losses.