DULUTH, Minn. (AP) — Utility company Allete Inc.’s second-quarter net income dropped 12 percent, hurt by higher expenses.

The company said Friday that it earned $17 million, or 48 cents per share, for the quarter. That’s down from $19.4 million, or 57 cents per share, during the same period a year earlier.

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Still, Allete’s earnings topped the 47 cents per share that analysts expected on average, according to a FactSet poll.

Allete said that an increase in the number of shares outstanding lowered its earnings by 2 cents per share.

Operating and maintenance expenses for the regulated operations unit increased by $7.9 million mostly because of scheduled maintenance projects at Minnesota Power’s generating stations.

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Depreciation and interest expenses rose because of recent investments in environmental improvements, renewable energy production and transmission assets.

Revenue for the period ended June 30 climbed 4 percent to $219.9 million from $211.2 million. Wall Street expected higher revenue of $222 million.

Allete forecasts full-year adjusted earnings between $2.40 and $2.60 per share. The Duluth, Minn. company said it is in “great position” to meet the outlook. Analysts predict $2.50 per share.

Allete’s shares shed 16 cents to $40.49 in midday trading.

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