Water company chemical leak costs top $10 million
American Water Works Inc., the parent company of West Virginia American Water, spent nearly $5 million in the second quarter to deal with continued effects of the Freedom Industries chemical leak.
The Vorhees, N.J.-based company detailed the costs in its second quarter earnings announcement Wednesday evening.
So far this year, the leak has cost the company $10.8 million in increased costs and lost revenue since the leak was discovered Jan. 9.
During the first quarter, the leak cost the company more than $1 million in lost revenue (a result of West Virginia American’s 1,000-gallon credits to affected customers), and $4.86 million in increased operating and maintenance costs.
Those costs include $1.9 million in legal fees to deal with the series of lawsuits filed following the leak of thousands of gallons of coal-cleaning chemicals into the Elk River.
The company racked up an additional $4.96 million in operating and maintenance expenses during the second quarter, according to its latest filing with the U.S. Securities and Exchange Commission. The company did not detail legal costs in its latest filing.
Despite the lingering financial effects of the leak, the company posted strong second-quarter results.
For the quarter that ended June 30, the company reported net income of $109.3 million, or 61 cents a share, an increase of 7.9 percent compared to the second quarter of 2013. Operating revenue was up 4.8 percent to $759.2 million.
The company said on an after-tax basis the Freedom Industries leak trimmed its net income by nearly $3 million, or 2 cents a share, in the quarter. Adjusting for that, the company’s net income was $112.3 million, or 63 cents a share, coming in just shy of analysts’ expectations of 64 cents, according to CNBC.com.
American Water Works stock was unchanged in after-hours trading Wednesday.
Company executives will host a conference call with analysts and shareholders at 9 a.m. Thursday to further discuss its results.
Contact writer Jared Hunt at email@example.com or 304-348-4836.