Fortis, the Canadian utility company with operations in North America and the Caribbean, has recorded a rise in earnings for the latest quarter. This increase can be attributed to new cost-of-capital parameters approved for its British Columbia operations and increased retail revenue in Arizona.
Strong Financial Performance
For the third quarter, Fortis saw net earnings of 394 million Canadian dollars ($284.9 million), or C$0.81 a share, compared to C$326 million, or C$0.68 a share, in the same period last year. On an adjusted basis, excluding the impact of mark-to-market accounting of natural gas derivatives at the Aitken Creek storage facility, per-share earnings rose to C$0.84, exceeding the mean forecast of C$0.81 from 11 analysts polled by FactSet.
Factors Contributing to Earnings Growth
Several factors contributed to Fortis' strong financial performance. In addition to the approved cost-of-capital parameters for its British Columbia operations, the company benefited from increased retail revenue in Arizona. This increase was due to warmer weather and new customer rates implemented at Tucson Electric Power. The higher U.S.-to-Canadian dollar exchange rate also supported earnings growth. Furthermore, Fortis experienced higher earnings at its Aitken Creek storage business.
Sales of Aitken Creek Facility
In May, Fortis reached an agreement to sell the Aitken Creek underground natural gas storage facility to Enbridge for approximately C$400 million. This transaction will further bolster Fortis' financial position.
Future Investment Plans
Fortis remains committed to its capital investment plans. With C$3 billion already invested through September, the company's C$4.3 billion capital plans for the year are on track. Looking ahead, Fortis has ambitious investment plans of C$25 billion from 2024 through 2028. This represents an increase of C$2.7 billion compared to its previous five-year plan. The additional investment will primarily focus on regional transmission projects and Arizona-based ventures.
In conclusion, Fortis' robust financial results demonstrate its solid performance and strategic investment approach. With continued investments and a strong market position, the company is well-positioned for future growth.
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