Pinnacle West posts $4.5 million 1Q loss on higher costs

Pinnacle West Corp. lost money in the first quarter because of swelling costs and a slumping real estate market, the power company said Tuesday.

Pinnacle West lost $4.5 million, or 4 cents per share, in the first quarter, compared with profit of $16.5 million, or 16 cents per share, in the first quarter last year.

Analysts polled by Thomson Financial forecast profit of 10 cents per share.

Pinnacle West runs two main businesses: a power company and a real estate developer. The first quarter was tough on both businesses.

Mushrooming costs crimped Pinnacle's power companies. The company's Arizona Public Service Co. lost $6.4 million in the quarter as it overhauled more plants and incurred higher system maintenance costs.

"To support current growth levels, we must continue building more electricity infrastructure at a time when basic building materials for providing electricity are at record-high prices," said Chairman Bill Post, citing prices for steel, copper, aluminum and concrete. "As a result, our costs for constructing needed facilities and maintaining APS' existing electric service continue to increase."

The company's SunCor Development Co. lost $900,000 amid the distressed real estate market.