According to a new report released by electric utility company PG&E, the company’s shares have dipped by 10 percent in the after-hours trading on Wednesday. The company has stated that its profits were affected by the forest fires which have terrorized California in recent weeks.
The after-effects of the fire are yet to be assessed and PG&E has stated that the uncertainty regarding the outcome of the assessment has caused the fall in the market.
In a statement made following the dip, PG&E said, “No causes have yet been determined for any of the unprecedented wildfires, which continue to be the subject of ongoing investigations.”
The company added, “However, California is one of the only states in the country in which courts have applied inverse condemnation to events caused by utility equipment”.
In the aftermath of the first wave of terror, PG&E cut its earnings forecast for the year. The company stated at the time that it had received nine lawsuits in connection to the wildfires.
The wildfires which broke out in October in California’s wine country have caused irreparable damages on both a personal and a professional level. In a recent statement, California’s Insurance Commissioner Dave Jones, stated that the fires had resulted in over $9.4 billion in residential and commercial claims.
The process has proved taxing to both residents and companies located in the affected areas. Both are aware that the procedure associated with claims will require a generous amount of time.
This, more than anything else, compelled PG&E to suspend its stock dividends. Speaking in a statement, PG&E’s corporate chair, Richard Kelly stated that “After extensive consideration and in light of the uncertainty associated with the causes and potential liabilities associated with these wildfires as well as state policy uncertainties, the PG&E boards determined that suspending the common and preferred stock dividends is prudent with respect to cash conservation”.
He added that the method was the best option for the “long term” interests of both its investors and customers.