Wednesday, utility company CenterPoint Energy, Inc., (CNP) reported a decline second-quarter profit reflecting lower revenues from ancillary services as a result of significantly lower commodity prices. Earnings for the quarter, however, came in ahead of analysts' consensus by a penny. The company also reaffirmed its earnings guidance for the full year 2009.
Commenting on the results, David McClanahan, president and chief executive officer said, "Despite the weak economy and changing energy markets, our business units continued to perform well. Our regulated electric and gas utilities turned in solid operating performances as did our pipeline and field services core operations. However, revenues from ancillary services declined from 2008 when we benefited from unusually high commodity prices."
The Houston, Texas-based company posted a second-quarter net income of $86 million or $0.24 per share, compared to $101 million or $0.30 per share in the prior year.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.23 per share. Analysts' estimates typically exclude special items.
Total revenues for the quarter plunged to $1.64 billion from $2.67 billion from a year ago. Analysts had a consensus revenue estimate of $2.22 billion for the quarter.
Segment-wise, revenues of Electric Transmission & Distribution increased to $521 million from $510 million last year. The segment's operating income was $162 million, compared to $164 million a year ago. Operating income for the quarter consisted of $129 million from the regulated electric transmission & distribution utility operations and $33 million related to transition bonds.
Natural Gas Distribution segment's revenues declined to $518 million from $726 million year earlier. Operating income was $2 million, compared to $4 million a year back. Operating income benefited from rate increases and lower bad debt expense, which were more than offset by higher pension and other employee-related expenses.
Revenues of Competitive Natural Gas Sales and Services plunged to $432 million from $1.24 billion last year. The segment's operating income was $6 million, compared to an operating loss of $5 million a year earlier.
Interstate pipelines segment reported revenues of $155 million, compared to $192 million in the previous fiscal. Operating income was $61 million, compared to $101 million a year back.
Revenues of Field services segment decreased to $56 million from $62 million a year before. Operating income of the segment was $23 million, compared to $32 million a year ago.
For the first six months of the year, the company posted a net income of $153 million or $0.44 per share, compared to $223 million or $0.66 per share in the previous year. Total revenues for the second quarter decreased to $4.41 billion from $6.03 billion in the prior year.
Looking ahead to fiscal 2009, CenterPoint reaffirmed its earnings guidance in the range of $1.05 to $1.15 per share. Analysts currently expect the company to report earnings of $1.08 per share for the full year.
Among others in the industry, American Electric Power Co. Inc. (AEP) last week reported a 12.5% year-over-year rise in second-quarter profit, helped by improved rate structures and cost controls.
Another industry peer, Xcel Energy Inc. (XEL) last week reported a rise in second-quarter profit helped by increases in electric margin and revenue from non-fuel riders.
CNP is currently trading on the NYSE at $12.04, down $0.05 or 0.41%. In the past 52-week period, the stock has traded in the range of $8.48 - $16.64, with an average 3-month volume of 3.83 million shares.
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