PG&E said Thursday that its fourth-quarter profit fell as it increased spending to update its system following the San Bruno pipeline accident.
Net income dropped to $83 million, or 20 cents a share, from $250 million, or 63 cents a share, a year earlier, the San Francisco-based company said in a filing with the U.S. Securities and Exchange Commission.
Excluding one-time items such as expenses related to pipeline safety work, profit was 89 cents a share, beating by 4 cents the average of 14 analysts' estimates compiled by Bloomberg. Revenue increased 5.4 percent to $3.8 billion, according to data compiled by Bloomberg.
California regulators said last month that PG&E's violations of state and federal safety laws led to a natural-gas pipeline explosion that killed eight people and destroyed 38 homes in San Bruno on Sept. 9, 2010.
Gas pipeline-related expenses for the quarter were $283 million, after accounting for $23 million of insurance payments. PG&E spent $180 million, or 26 cents a share, on expenses related to the blast's aftermath including tests to determine the pipeline's strength and legal fees. The utility also set aside $200 million, or 49 cents a share, for potential regulatory fines in the quarter.
PG&E estimates that fines from state regulatory investigations will be at least $200 million, CEO Anthony Earley said Thursday during a conference call with investors.
The company also raised the cost estimate for improvements to its gas pipeline system 36 percent to a range of $450 million to $550 million pretax.
PG&E will have to sell about $300 million in additional shares for a total of $600 million this year to pay for expected fines and increased costs, CFO Kent Harvey said Thursday during conference call with investors.
The higher costs for pipeline improvements caused PG&E to cut its forecast for 2012 profit to a range of $1.88 a share to $2.67 a share from $2.36 to $3.16. The company maintained its forecast for 2012 earnings excluding one-time items at $3.10 a share to $3.30 a share.