PG&E Corp. reported a $2.6 billion loss for the second quarter as costs from devastating wildfires in 2017 and 2018 and the California utility’s giant’s ongoing bankruptcy wiped out earnings.
The loss included a $3.9 billion pre-tax charge for estimated claims related to the fires, the company said in a statement Friday. PG&E, which did not provide guidance for the year, filed for Chapter 11 in January facing an estimated $30 billion in liabilities from blazes tied to its equipment.
Investors largely shrugged off the loss, and PG&E shares were little changed before the start of regular trading on Wall Street. The company’s adjusted operating earnings per share of $1.10 beat the average analyst estimate by 11 cents.
“We recognize we are operating from a deficit when it comes to public trust, and to regain that trust, we must sustain excellent operational performance day after day, month after month, year after year,” PG&E Chief Executive Officer Bill Johnson said in the statement.
The results come on the day that PG&E and other parties are due to submit recommendations to the judge overseeing the company’s Chapter 11 proceedings on how to evaluate alternative restructuring proposals.
A group of creditors including Pacific Investment Management Co. and Elliott Management Corp. are pushing to take control of PG&E. The bondholders have put forward a $31 billion proposal that could give them control of 95% of PG&E’s stock. On Thursday, meanwhile, hedge funds Knighthead Capital Management and Abrams Capital Management, which together own about 7.8% of the company, filed plans with regulators to raise $15 billion of equity to bolster PG&E’s plans to emerge from bankruptcy.
After it exits bankruptcy, PG&E has agreed to make a $4.8 billion initial contribution to a $21 billion state wildfire fund. It will help utilities pay for future claims from wildfires tied to their equipment.
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