Energy transportation and distribution company Enbridge Inc. (ENB,ENB.TO) on Wednesday reported a profit for the third quarter that more than doubled from last year, helped by strong results at the company's liquids pipelines and natural gas businesses. On an adjusted basis, quarterly earnings per share rose 75% from the prior-year period. Buoyed by the results, the company raised its adjusted earnings outlook for the full year.
Third-Quarter Results
Calgary, Canada-based Enbridge posted third-quarter earnings applicable to common shareholders of C$303.8 million or C$0.83 per share, up from C$148.4 million or C$0.41 per share in the previous-year quarter.
The increase in earnings for the latest quarter reflects higher allowance for equity funds used during construction in Liquids Pipelines, a higher contribution from Enbridge Energy Partners and unrealized fair value gains on derivative financial instruments used to risk manage commodity, foreign exchange and interest rate variability.
Adjusted earnings for the quarter rose to C$152.3 million or C$0.42 per share from C$85.8 million or C$0.24 per share in the same period last year.
Revenues for the latest quarter dropped 40% to C$2.63 billion from C$4.37 billion a year ago.
Peer Performance
TransCanada Corp. (TRP,TRP.TO) on Wednesday reported a decline in profit for the third quarter to C$345 million or C$0.50 per share from C$390 million or C$0.67 per share in the previous-year quarter. However, revenues for the quarter increased to C$2.25 billion from C$2.14 billion in the year-ago quarter.
Other Metrics
Enbridge's commodity sales revenue for the quarter dropped 48% to C$1.96 billion from C$3.77 billion a year earlier. Revenues from Transportation and other services were C$666.1million, up 11% from C$602.1 million in the previous year.
Total expenses for the quarter were C$2.35 billion, down from C$4.08 billion in the year-ago period. Other investment income for the quarter rose to C$256.0 million from C$41.4 million a year ago.
Segmental Results Liquids Pipelines posted revenues of C$339.0 million, up from C$287.4 million in the prior-year quarter. Earnings for the segment rose to C$116.5 million from C$74.1 million a year ago. The company said it was encouraged by increasing signs of renewed activity in the oil sands as commodity prices recover.
Revenues from Gas Pipelines increased to C$96.1 million from C$85.9 million last year, while earnings increased to C$17.4 million from C$12.6 million. The company noted that its existing asset base, which is adjacent to shale gas plays in Texas and Louisiana as well as the emerging shale plays in northeastern B.C. and the Bakken Formation in Saskatchewan and North Dakota, gives it strong competitive positioning.
Sponsored Investments revenues for the quarter were C$79.4 million, compared to C$72.2 million a year ago. Earnings for the segment were C$30.3 million, up from C$27.4 million a year ago.
Within sponsored investments, Enbridge Income Fund, or EIF, announced a proposed corporate restructuring on November 2, under which Enbridge plans to convert EIF into a taxable corporation before the Canadian government begins taxing income trusts in 2011. The restructuring would be subject to approval by unitholders at the EIF annual meeting in May 2010. Enbridge said it is not considering acquiring the public's interest in EIF.
Meanwhile, revenues for Enbridge's core Gas Distribution and Services segment declined to C$2.11 billion from C$3.92 billion in the previous year. The segment reported a loss of C$1.5 million compared to earnings of C$35.8 million a year ago.
Revenues for the International segment were C$1.5 million during the quarter, down from C$2.0 million in the prior-year period. The segment reported a loss of C$1.1 million compared to earnings of C$6.7 million in the previous-year quarter.
Year-To-Date Results
For the first nine months of the year, Enbridge reported an increase in earnings applicable to common shareholders to C$1.25 billion or C$3.43 per share from C$1.06 billion or C$2.92 per share in the prior-year period.
Adjusted earnings for the period rose to C$616.2 million or C$1.70 per share from C$474.2 million or C$1.32 per share in the same period a year ago.
Revenues for the nine months declined to C$9.28 billion from C$12.21 billion a year earlier.
Outlook
For fiscal year 2009, Enbridge now forecasts adjusted earnings in a range of C$2.30-C$2.36 per share. Earlier, the company had projected earnings to be at the upper half of the prior range of C$2.18-C$2.32 per share. The company noted that the revised outlook will represent an increase of more than 20% over the prior year.
Patrick Daniel, President and Chief Executive Officer of Enbridge said, "Looking ahead, we have more than C$12 billion of commercially secured projects and have identified another C$30 billion of organic growth opportunities. We will remain focused on effective capital management and discipline in evaluating projects so as to continue delivering on our unique investor value proposition of growth and income, supported by a low risk business model."
dividend
Enbridge's board of directors declared quarterly dividends of C$0.37 per common share and C$0.34375 per Series A Preferred Share. Both dividends are payable on December 1, 2009 to shareholders of record on November 16, 2009. Stock Quotes
In Wednesday's regular trading on the NYSE, ENB is currently trading at US$40.37, up US$1.25 or 3.20% on a volume of 64 thousand shares. In the 52-week period, the stock has been trading in a range of US$26.29-US$42.27.
On the TSX, ENB.TO is currently trading at C$42.65, up C$0.70 or 1.67% on a volume of 0.17 million shares. In the past 52 weeks, the stock has been trading in a range of C$33.80-C$43.47.
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