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Archive for Tuesday, September 28, 2004

Westar lowers earnings estimate

Topeka company cites mild weather, outage

September 28, 2004

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— Westar Energy Inc. expects to earn 15 cents per share less from its ongoing operations in 2004 than previously projected, the company said Monday.

Westar said it was now projecting its annual earnings from ongoing operations at between $1.35 and $1.45 per share. In March, the company said it expected earnings between $1.50 and $1.60 per share; it reaffirmed that target in early August when it released its second-quarter financial results.

Cooler-than-expected weather this summer and a three-week outage earlier this year at one of its generating units were major factors in revising the forecast, Westar said.

"Our earnings can be significantly impacted by weather, unplanned outages and wholesale power prices," said Mark Ruelle, the company's executive vice president and chief financial officer.

As an example of how weather can affect the company's bottom line, Westar said its customers' need for electricity in August was about 20 percent lower than the 20-year average. Westar is Kansas' largest electric company with about 654,000 customers, including Lawrence residents.

"I'm not surprised there was a reduction," said Jim Zakoura, an Overland Park attorney representing large Westar industrial customers. "I would have thought that it would have been greater."

Bruce Burns, the company's director of investor relations, also cited mechanical problems at one of the three coal-fired generators at the Jeffrey Energy Center outside St. Marys, northwest of Topeka. The company shut the unit down for three weeks in late January and early February for repairs.

Westar said its other generating plant could not produce enough electricity to make up the difference over time.

"It reduces the opportunity to make some wholesale sales," Burns said.

In trading Monday, shares of Westar closed down 16 cents, to $20.05.

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