Pinnacle West profit falls as higher interest, depreciation offset demand gains

Pinnacle West Capital said on Tuesday its second-quarter profit fell 7.3%, as higher interest costs and depreciation offset gains from strong demand and customer growth.

Higher-for-longer interest rates are pressuring utility companies by raising the borrowing costs needed to build and maintain power grids, even as surging energy demand forces them to expand infrastructure.

• The Phoenix, Arizona-based utility said net income attributable to common shareholders declined to $178.6 million, or $1.43 per share, for the quarter ended June 30, from last year's $192.6 million, or $1.58 per share.
• Shares of the company were down 1.9% premarket.
• The company's total operating expense rose to $1.15 billion during the quarter, from $1.05 billion during the same period a year ago.
• Its total interest costs rose to $122.2 million, from $102 million a year ago.
• Pinnacle West reaffirmed its earnings forecast of $4.55 to $4.75 per share.
• Its main subsidiary, Arizona Public Service, which serves about in the state, saw a increase in customers in the quarter.