Tuesday, oil and gas company El Paso Corp. (EP) reported a huge decline in profit for the third quarter quarter, impacted by the lower oil prices, which more than offset an increase in revenues from pipeline segment. Looking ahead, the company lifted its full year 2009 earnings outlook. Separately, El Paso announced a reduced quarterly dividend for its shareholders.
The Houston, Texas-based company's net income attributable to common shareholders plunged to $58 million or $0.08 per share from $436 million or $0.58 per share in the prior year period.
Excluding impact of E&P or exploration and production financial derivatives of $118 million or $0.11 per share, adjusted earnings for the period was $0.23 per share, down from $0.35 per share in year earlier period.
On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.
Operating revenues for the period declined to $0.98 billion from $1.59 billion in the preceding year quarter. Four analysts expected revenues of $1.12 billion.
In the sequentially preceding second quarter, El Paso's profit declined 59% to 79 million or $0.11 per share from $191 million or $0.25 per share in the year-ago quarter and adjusted earnings for the second quarter was $0.25 per share, down from $0.39 per share in the year-ago second quarter. Quarterly operating revenues declined 15% year-over-year to $973 million from $1.15 billion in the prior-year quarter.
For the quarter under review, El Paso reported lower production volumes due to a sharp drop in drilling activity in response to lower natural gas and oil prices. Production volumes for the quarter averaged 732 million cubic feet equivalent per day, or MMcfe/d, including 71 MMcfe/d of unconsolidated affiliate volumes. The prior-year quarter's production volumes averaged 793 MMcfe/d, including 75 MMcfe/d of unconsolidated affiliate volumes.
The exploration and production segment revenues, the largest contributor of revenues for the year-ago quarter to El Paso, slipped to $343 million from $881 million last year. However, the company's pipeline revenues grew to $667 million from $628 million a year earlier.
The company's operating income for the quarter was $329 million, down from $839 million in the same period last year.
Including financial derivative settlements, the company's average realized prices for natural gas per thousand cubic feet or MCF was $7.37, down from $8.67 a year-ago and, average realized prices for oil, condensate, and NGL were lower at $82.25 compared with $88.13 a year earlier.
Tulsa, Oklahoma-based Williams Companies, Inc. (WMB) on October 29 reported a 61% drop in third-quarter profit, hurt by lower energy commodity prices that saw a steep decline in profit at its two major segments. For the third quarter, net income attributable to Williams plunged to $143 million or $0.24 per share from $366 million or $0.62 per share for the same quarter last year.
Natural gas storage and transportation company DCP Midstream Partners, LP (DPM) is slated to report its financial results for the third quarter on November 5. Analysts expect the company to report earnings of $0.28 per share for the quarter on revenues of $243.16 million for the third quarter.
In a separate statement, the company said that it plans to sell an additional $300 million to $500 million of assets during 2010.
Further, the company said its board has approved a reduction in its quarterly dividend from $0.05 to $0.01 per share. The dividend reduction will result in approximately $112 million of annual cash savings.
The quarterly dividend will be payable January 4, 2010 to shareholders on record as of the close of business on December 4.
"At the same time, we've continued to fund sustainable growth opportunities in both core businesses. Our actions to make significant reductions in our ongoing cost structure, streamline our organization and reduce the dividend are designed to improve the long term returns to our shareholders," commenting on the steps taken by the company to improve financial flexibility Doug Foshee, chairman, president, and chief executive officer said.
Looking forward, for the fiscal year 2009, the company said it is raising its adjusted earnings per share outlook and now expect earnings per share in the range of $1.15 to $1.20. Street analysts currently expect earnings of $1.11 per share for the year.
Tuesday, EP closed at $9.80,up $0.12 or 1.24%, on a volume of 13.30 million shares on NYSE. In after hours, the stock declined $0.44 or 4.49%, trading at $9.36.
In the past 52 weeks, the stock trended in a broad range of $5.22 - $11.37, with a three-month average volume of 7.70 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.