Thursday, diversified natural gas company Southern Union Co. (SUG) reported a rise in the fourth-quarter net earnings from the year-ago period primarily due to lower cost of gas and other energy. The company also issued its fiscal 2009 earnings per share view.
The Houston, Texas-based company reported an increase in the fourth-quarter net earnings to $120.89 million or $0.97 per share from $49.39 million or $0.41 per share in the corresponding period last year.
Adjusted net earnings for the quarter increased to $59.33 million or $0.47 per share from $49.39 million or $0.41 per share in the similar period last year. On average, nine analysts polled by Thomson Reuters estimated earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude special items.
Adjusted net earnings for the quarter exclude a non-cash after-tax mark-to-market unrealized gain on open economic hedges of 2009 processing spreads, an after-tax gain related to the company's repurchase of its preferred stock and a change in tax benefit associated with the dividends received deduction for anticipated dividends from the company's Citrus investment.
Operating revenues for the quarter increased to $727.12 million from $722.91 million in the fourth-quarter of fiscal 2007. Analysts estimated revenue of $691.89 million for the quarter.
George Lindemann, chairman and CEO, said, "In light of two significant hurricanes and a major degradation of the economy, commodity and credit markets in the fourth quarter, we are very pleased to have reported solid adjusted earnings of $1.81 per share for 2008. We are equally pleased to announce 2009 adjusted earnings guidance in the range of $1.75 to $1.90 per share."
Cost of gas and other energy for the fourth-quarter of fiscal 2008 decreased to $343.51 million from $414.68 million in the comparable period last year.
For fiscal 2008, net earnings increased to $279.41 million or $2.26 per share from $211.35 million or $1.75 per share in the corresponding period last year.
Adjusted net earnings for the fiscal 2008 increased to $223.43 million or $1.81 per share from $205.63 million or $1.70 per share in the full year 2007.
Adjusted net earnings for 2008 exclude a non-cash after-tax mark-to-market unrealized gain on open economic hedges of 2009 processing spreads, an after-tax charge related to the company's repurchase of its preferred stock during the year and a change in tax benefit associated with the dividends received deduction for anticipated dividends from the company's Citrus investment. Adjusted net earnings for 2007 exclude an after-tax gain of $10.5 million related to the settlement of litigation.
Operating revenues for the full year 2008 increased to $3.07 billion from $2.62 billion in the fiscal 2008.
Looking forward, the company expects fiscal 2009 net earnings in the range of $1.45 to $1.60 per share and adjusted net earnings between $1.75 and $1.90 per share. Analysts currently estimate earnings of $1.70 per share for the full year 2009.
President and COO Eric Herschmann is of the view that strong cash flows and earnings reported by the company in 2008 in the midst of the recent economic downturn reflect the stability of low-risk business profile and regulated business segments.
The company believes that the completion of Trunkline LNG Infrastructure Enhancement Project this year will further add to stable cash flow and earnings base in 2009 and beyond.
Southern Union is currently trading at $13.36, up $0.99 or 8.00% on a volume of 936,377 shares on the NYSE.
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