Profits of Potomac Electric Power Co. fell about 8 percent last year and its quarterly dividend rate will not be raised, but earnings soared at Reynolds Metals Co. and several large Washington regional banking companies, the firms reported yesterday.
Pepco's earnings report for last year was issued after directors of the Washington-based electric utility decided not to raise the firm's dividend rate from the current quarterly level or 33 1/2 cents a share, which has existed since the payout was raised from 32 cents at this time last year.
According to Chairman W. Reid Thompson, Pepco's profits fell to $78.76 million ($1.70 a share) from $84.94 million ($1.82) the previous year despite an increase in revenues from $664 million to $715 million.
In the fourth quarter alone, Pepco earned $16.5 million (33 cents) compared with $19.2 million (40 cents) in the 1977 period, and the accelerating decline of profitability was thought to be the major factor in a decision not to raise dividends for a company that is among the most widely owned by area stockholders.
Thompson headed most of the blame for the utility's lackluster performance on the D.C. Public Service Commission, which has not acted on a Pepco rate increase request filed some 18 months ago to boost monthly charges by about 16 percent. He noted that Pepco's current rates in the city are based on 1975 costs.
In addition, Pepco yesterday asked Maryland's Public Service Commission to increase rates by $19.1 million or 5.2 percent, to cover higher costs. The utility serves D.C. and the populous Maryland suburbs of Washington as well as a small section of Northern Virginia.
"Improved 1978 earnings would have permitted the needed dividend increase required to make Pepco stock sell at competitive prices in the market and to fairly compensate investors in these inflationary times," Thompson said in a statement.
On the New York Stock Exchange yesterday, Pepco fell 25 cents a share to 13 7/8, near its low of 12 1/2 in the past year. The highest Pepco has traded in the recent 12 months was 15 3/4 a share.
Reynolds Metals Co., the largest industrial firm based in Virginia, reported record profits of $118 million ($6.11 a share) for 1978 compared with $86 million ($4.61) the previous year as sales soared from $2.35 to $2.83 billion.
Chairman David Reynolds said increased demand for aluminum and higher profit margins made the higher earnings possible. Reynolds, the nation's second largest aluminum producer, shipped 1.29 million tons last year compared with 1.19 million tons in 1977. In the fourth quarter, the Richmond firm earned $38 million ($1.99) vs $23 million ($1.20).
Meanwhile, major regional banking companies continued to report record earnings for last year. For the most part, the sharp gains reflect higher interest rates on increased loan volume -- demand which the federal government has been attempting to slow in its anti-inflation fight.
C. Coleman McGehee, chairman of Richmond-based First & Merchants Corp., noted that an analysis of his company's earnings last year (up 22 percent) showed 60 percent of the year-to-year increase reflected a greater volume of earning assets while higher rates accounted for the balance. Details for the various bank firms, with earnings before securities transactions:
Maryland National Corp., parent firm of Maryland National Bank, the largest in the state -- annual earnings of $21.6 million ($3.03 a share), up 15 percent from $18.7 million ($3.63); assets averaged $3 billion vs. $2.8 billion; loan volume averaged $1.89 billion vs. $1.74 billion.
First Maryland Bancorp, parent firm of First National Bank of Maryland -- annual earnings of $15.3 million ($1.12), a record, vs. $12.2 million ($3.40), a gain of 21 percent; assets rose 16 percent to $1.85 billion, while loan volume increased 15 percent to $1.12 billion.