Hawaiian Electric Industries Inc. eked out a 1 percent increase in third-quarter net income as gains in its banking business helped offset lower earnings at its utility subsidiary, the company reported Thursday.
HEI earned $48.2 million in the third quarter, up from $47.7 million during the same three-month period in 2012. Despite the rise in net income, HEI’s earnings per share slipped to 48 cents in the third quarter from 49 cents a year earlier because of an increase in the number of shares issued through its dividend reinvestment program.
Hawaiian Electric Co.’s net income fell by $600,000 to $37.8 million, largely because of higher expenses for investment in equipment and an increase in operation and maintenance costs.
HECO reported a $2 million year-over-year increase in expenses related to investments aimed at increasing reliability and allowing greater amounts of renewable energy onto the grid. HECO operates electric utilities on Oahu and Hawaii island and in Maui County.
Systemwide improvements included replacing and upgrading more than 750 transformers, replacing more than 200,000 feet of cable and an expansion of the utility’s fiber-optic system used to control and operate its grid and detect problems.
"HEI’s three utilities have made local infrastructure investments totaling more than $235 million to ensure safe and reliable service as they integrate more clean energy," said Constance Lau, HEI president and chief executive officer.
HEI also spent $2 million more than last year for operations and maintenance.
Those expenses were largely offset by revenue from higher rates and a favorable income tax adjustment. HEI reported a $2 million increase in revenue primarily from an upward rate adjustment on Oahu. Revenue would have been higher if not for a ratepayer refund in Maui County.
The state Public Utilities Commission ordered Maui Electric Co. in May to refund $8.1 million to ratepayers, citing wasted renewable energy, operating inefficiencies and delays in sh
utting down fossil fuel power plants.
HEI last week reported earnings for its American Savings Bank subsidiary. Strong loan g
rowth helped boost American Savings’ earnings 7.5 percent to $15.3 million in the third quarter, primarily driven by increases in commercial lending, commercial real estate portfolios, home equity lines of credit and residential mortgages.
Overall, loans rose 7.9 percent to $4.1 billion from $3.8 billion and are now up 9.3 percent since the start of the year.
The financial results were released after the market closed. HEI shares closed down 47 cents at $24.63 on the New York Stock Exchange.
