Raleigh, N.C. — Citing increased operation and maintenance costs, Progress Energy (NYSE: PGN) reported Thursday morning revenues and profits that missed Wall Street analysts’ expectations.

Earnings of 40 cents per share, or $103 million, fell short of the 50-cent-per-share profit as expected by analysts surveyed by Thomson Financial.

Excluding operations that had been sold, Progress said ongoing operations produced a 39-cent profit per share, down from 42 cents for the same period a year ago.

The news, which was announced before markets opened today, helped push progress shares down 13 cents, at $44.90, as trading began. However, minutes later shares moved higher to $45.50. But by early afternoon shares dropped back to $44.24, a drop of 79 cents from the opening bell.

In a statement, Progress Chairman and Chief Executive Officer Bill Johnson noted that the past year had been one of change for the company as it sold off several subsidiaries in order to concentrate on its core power business.

"During a year of transition, Progress Energy successfully met its core ongoing earnings target in 2007," he said. "We also completed our restructuring plan, reduced our risk profile, and our employees achieved excellence in plant operations, service reliability and customer service.

"Upon the closing of the coal mine and river terminals sale agreement, we will become the nation's largest pure-play regulated electric utility, with a clear, achievable strategy for long-term success. We are adapting well to an industry being shaped by the issue of climate change and the growing demand for energy. Our company is well positioned to enter an era of expansion and growth in our utilities, with a balanced approach that emphasizes energy efficiency, the use of alternative and renewable energy sources and state-of- the-art power plants," he added.

For the year, Progress reported a 7 percent increase in revenues to $2.2 billion from the previous 12 months.

Over the next 12 months, Progress forecast a profit of $305 per share, 1 cent higher than analysts forecast.