BANGOR ? Bangor Hydro-Electric Co. has announced earnings of 40 cents per common share for the quarter ending March 31. Last year’s earnings for the same period were 53 cents per common share.

The primary cause for the decline in the first quarter earnings involved the exercise of the company’s common stock warrants by their holders. These warrants were issued to stockholders and roughly 120 municipalities in Bangor-Hydro’s service territory in connection with the restructuring of a major power purchase contract in 1998. The warrants allowed holders to purchase outstanding shares at a previously specified price of $7. Stockholders then had the option of cashing in the shares at their current trading price. At the close of Friday’s stock market, Bangor Hydro’s was trading at $26.12. That rate is expected to climb to $26.50 when Bangor-Hydro’s merger with Emera Inc. of Nova Scotia completes necessary regulatory approvals in the first half of this year.

During the first quarter of 2001, holders of the common stock warrants exercised their rights on several occasions at times when the market price exceeded book value. In total for the quarter, this resulted in pre-tax charges to earnings of $2.7 million or 22 cents per common share, net of taxes. Absent this charge, earnings would have been 62 per cents per common share for the first quarter of 2001.

Other factors affecting earnings in the first quarter included new rates implemented by order of the Maine Public Utilities Commission, reflecting a lower authorized return on equity and enhanced energy sales in 2001 due to colder weather.

Earnings for the 12 months that ended March 31 were $1.34 per common share compared to $2.35 per common share for the previous year. The 12-month earnings declined for the same mentioned reasons as well as the recognition of $3.1 million of costs to the proposed merger with Emera, which was announced June 30, 2000.