PacifiCorp's first annual report as the parent company of Utah Power & Light Co. is out this week, and the numbers look good. As a result of the merger and consolidation of financial services, 1988 revenues were up 7 percent to $3.5 billion and earnings per share were $3.46, compared to $3.18 in the previous year.

On the other hand, notes A.M. Gleason, president and chief executive, with the issuance of PacifiCorp stock to UP&L shareholders, the number of shares outstanding soared from 69.7 million to 123.2 million.The challenge now, concede Gleason and Chairman Don C. Frisbee, who has retired from active management, "is to overcome the earnings per share dilution resulting from those new shares through the realization of merger benefits and enhanced opportunities."

Those opportunities are great, they contend, and will more than offset the temporary dilution of shares. The two combined utilities - nearly double the customer base and revenues of Pacific Power alone - are aiming at benefits ranging from nearly $50 million this year to $160 million annually by 1993, a total of $500 million over five years.

The key to this is the "peaking differences" of the two utilities. In Utah, the heaviest demand for electricity is in the summer, pushed up by air conditioning and irrigation. For much of Pacific Power's system, the greatest needs are for space heating during winter.

Obviously, it's a marriage made in heaven, as it puts generating resources to maximum use and lessens the need for either utility to purchase additional power during peak periods.

Then there's the savings in labor costs. According to the report, Pacific Power and Utah Power are "well on the way" to reducing, through attrition, 900 positions over the next five years.

The merger places PacifiCorp's electric operations third in the West based on number of customers, revenues and kilowatt-hour sales. Merger efficiencies, says the report, have even now begun to reduce prices. This, says PacifiCorp, makes the Utah Power division more competitive and aids economic development efforts.

According to Gleason and Frisbee, the merger is the best possible example of the PacifiCorp's strategy to expand operations but only with businesses "that we know and understand" - a plan many "diversified" companies wish they had emulated in recent years.

Not that PacifiCorp has all of its eggs in one electric utility basket. Non-electric businesses remain important, providing 39 percent of revenues while requiring only 31 percent of invested capital. Telecommunications, mining/resource development and financial services contributed some $120 million (28 percent) to the corporate pie - a hefty slice.

On the other hand, nothing's set in concrete at PacifiCorp, the two top executives make clear.

"We would not hesitate to narrow our activity in any of the non-electric areas if doing so enhanced our longer-term prospects."

The merger became effective Jan. 9 with PacifiCorp reincorporated in Portland, Ore. The pricing period for the stock ended Jan. 3, yielding an average price for PacifiCorp stock of $35.713. The price set a conversion ratio of .909 PacifiCorp shares for each share of Utah Power.