Natural gas and oil pipeline company Spectra Energy Corp. (SE) on Friday reported a 2 percent increase in profit for the first quarter, reflecting higher earnings at its distribution segment. Both revenues and earnings per share beat analysts' estimates.
U.S. Transmission reported a 2 percent decline in first-quarter earnings before interest and taxes or EBIT to $266 million. Spectra Energy noted that an increase in business expansion EBIT was more than offset by anticipated lower storage and transportation revenues.
Distribution segment's EBIT rose 11 percent to $168 million, mainly due to higher customer usage as compared to last year when weather was warmer than normal.
Western Canada Transmission and Processing's EBIT declined 20 percent to $111 million, reflecting lower earnings in the conventional gathering and processing business, driven by anticipated lower contracted volumes and lower interruptible revenue.
Field Services EBIT declined 5 percent to $88 million, reflecting lower natural gas liquids prices and volumes. These decreases were partly offset by an increase in gains on units issued by DCP Partners and a reduction in depreciation expense.
Liquids reported EBIT of $6 million, consisting primarily of Express-Platte system results from the partial month ownership in March.
Spectra Energy's first-quarter net income from controlling interests increased to $340 million from $333 million in the prior-year quarter. However, earnings remained flat with the year-ago period at $0.51.
On average, 10 analysts polled by Thomson Reuters expected the company to report earnings per share of $0.48 for the quarter. Analysts' estimates typically exclude one-time items.
Operating revenues for the quarter increased 3 percent to $1.59 billion from $1.54 billion in the same period last year and beat analysts' consensus estimate of $1.55 billion.
Currently, Spectra Energy is executing on more than $6 billion of expansion projects. In the U.S., the NJ-NY Expansion Project is over 70 percent complete and is on track to enter service in late 2013.
Spectra Energy noted that the previously announced Express-Platte Pipeline System acquisition closed ahead of schedule in mid-March and it is seeing increased utilization on the Express pipeline, with the Platte pipeline already at full capacity. The company added that it is making good progress on the Sand Hills and Southern Hills NGL pipelines and expects them to be fully in-service by mid 2013.
In Friday's regular session, SE is trading at $30.94, down $0.05 or 0.16 percent on a volume of 549,170 shares.
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