THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, April 20, 1996 TAG: 9604200350
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: KILL DEVIL HILLS, N.C. LENGTH: Short : 49 lines
Dominion Resources Inc. executives took shots from shareholders on issues ranging from their pay to their purchasing practices at the utility-holding company's annual meeting here Thursday.
But the complaint that surfaced most frequently dealt with the Dominion board's decision late last year not to increase the company's dividend, the first time in decades that the stock payout wasn't increased.
``Not raising the dividend was one of the hardest decisions I've had to make,'' said Thomas E. Capps, chairman of Dominion, the parent of Virginia Power and North Carolina Power. ``But it was the right decision.''
Capps said increasing competition in the electric-utility industry was the main reason for freezing the dividend at 64.5 cents per share per quarter. In a more competitive environment, he said, Dominion has to reduce the percentage of its earnings that it pays back to shareholders.
Dominion reported strong first-quarter profits Thursday. The Richmond-based company said that largely because of cold winter weather, its Virginia Power and North Carolina Power units racked up a combined 36 percent increase in operating profits during the recent quarter.
That pushed Dominion's net income for the first quarter to $150.2 million, or 85 cents a share, up 38 percent from earnings of $108.5 million, or 63 cents a share, in the same period last year. Dominion's revenues rose 10 percent to $1.24 billion in the latest quarter.
In case the weather doesn't cooperate in future years, Capps laid out a number of steps Dominion is taking to ensure earnings growth. Dominion is stepping up its investments in financial services and in energy operations outside of Virginia Power's territory. Earlier this week, for example, Dominion announced it will buy a major coal-fired power plant in Illinois.
But the strategy for improving earnings also involves a painful streamlining of its Virginia Power and North Carolina operations. In the year since it started a massive reorganization of those utilities, more than 1,000 of Virginia Power's 10,600 employees have lost their jobs. More cutbacks are planned.
The job cuts were felt hardest by Virginia Power's hourly employees, who received one month's severance pay - a fraction of what salaried employees have received. by CNB