PG&E’s net income up, despite fires

PG&E Corp. reported net income of $564 million for the third quarter of 2018, up from $550 million during the same period last year.

Legal and other costs related to last year’s Northern California wildfires totaled $18 million for the company, PG&E said Monday. Its revenue was $4.38 billion, compared with $4.52 billion a year ago.

Adjusted for one-time charges, earnings were $1.09 per share, slightly topping estimates. The company’s stock rose nearly 3 percent Monday, closing at $48.71.

“Driven by the growing threat posed by extreme weather, PG&E is making critical investments and further enhancing our operations so that our communities are safer and more resilient,” CEO Geisha Williams said in a statement.

During a conference call with analysts, Williams detailed a $6 billion plan for tracking weather conditions and improving communication with local and state agencies, including installing 1,300 weather stations and 600 cameras over four years.

Investigators with the California Department of Forestry and Fire Protection said over the summer that PG&E power lines or electrical equipment sparked 12 fires in the state. But the cause of last October’s Tubbs Fire in the Wine Country, the most destructive blaze in California history, has yet to be determined.

The Tubbs Fire killed 24 people and destroyed more than 5,600 businesses, homes and other buildings. If PG&E is found liable for the Tubbs Fire, which stretched from Calistoga to Santa Rosa, the company could face billions of dollars in liability.

Travis Miller, director of utilities research at Morningstar, said Monday’s earnings report didn’t have any surprises.

“The wildfire developments remain the key investor concern right now, and we’re waiting for substantial details and developments related to those issues,” Miller said. “We didn’t see anything unusual in the company’s releases that gave us much more insight into those key developments.”

The year ahead will be critical for both the company and investors, Miller said, as PG&E balances handling the wildfire developments and company growth.

“There are issues around the wildfires, but they also have to execute their core growth program, and that’s going to be key to determine if they can meet the market growth expectations,” Miller said.