Monday, diversified natural gas company Southern Union Co. (SUG) reported a drop in earnings for the first quarter, reflecting a slew of one-time items and a decline in revenues. On an adjusted basis, earnings beat analysts' consensus by nine cents. Southern Union also reaffirmed its earnings forecast for fiscal year 2009, citing stable fee-based revenues.
For the first quarter, the Houston, Texas-based company's net earnings available for common stockholders plunged to $44.10 million or $0.36 per share from $79.00 million or $0.64 per share in the prior-year quarter.
Results for the quarter included a $10.10 million, or $0.08 per share, charge to increase the provision for repair and abandonment costs as a result of damage caused by Hurricane Ike and a $9.72 million, or $0.08 per share, mark-to-market unrealized loss on open economic hedges processing spreads. Net earnings exclude a $9.2 million, or $0.07 per share, mark-to-market gain on economic hedges.
Excluding items, net earnings available for common stockholders was $73.10 million or $0.59 per share. On average, seven analysts polled by Thomson Reuters expected the company to earn $0.50 per share for the first quarter. Analysts' estimates typically exclude special items.
In the fourth quarter, the company had reported net earnings of $120.89 million or $0.97 per share, and adjusted earnings of $59.33 million or $0.47 per share.
Operating revenues for the latest first quarter dropped sharply to $684.00 million from $953.00 million in the previous-year quarter, yet topped analysts' consensus revenue estimate of $655.80 million. For the sequentially preceding quarter, operating revenues were $727.12 million.
Net operating revenues for the quarter declined 11% to $287.00 million from $324.00 million, while adjusted net operating revenues decreased to $317.00 million from $324.00 million in the same quarter of last year.
For the quarter under review, Southern Union's transportation and storage segment generated operating revenues of $192.30 million from $187.10 million last year, largely due to increase in parking revenue and reservation revenue, offset by a decrease in transportation commodity revenue. Gathering and processing segment revenues for the quarter dropped to $168.31 million from $416.00 million and distribution segment revenues decreased to $322.02 million from $349.00 million in the previous-year quarter
Cost of gas and other energy for the quarter plunged to $380.10 million from $610.20 million in the corresponding quarter of last year. Total operating expenses for the quarter was $592.20 million compared to $799.14 million in the year-ago quarter.
Amongst others in the sector, Merrillville, Indiana-based Energy holding company NiSource Inc. (NI)on May 1 reported a net income for the first quarter that rose to $148.4 million or $0.54 per share from $99.3 million or $0.36 per share in the year-ago period. The group's net revenues for the quarter increased to $1.07 billion from $1.04 billion in the same period last year, while gross revenues dropped to $2.7 billion from $3.3 billion a year ago.
Looking forward, for fiscal year 2009, Southern Union continues to expect ongoing earnings within a range of $1.45-$1.60 per share, and adjusted net earnings of $1.75 - $1.90 per share.
Wall Street analysts expect the company to report earnings for the year of $1.67 per share.
Southern Union stated that adjusted net earnings guidance attribute the impact of previously accrued mark-to-market unrealized gains on economic hedges of 2009 processing spreads to 2009 adjusted net earnings and exclude the increase to the provision for repair and abandonment costs as a result of damage to the company's Sea Robin pipeline system caused by Hurricane Ike.
In Monday's regular trading session, SUG is trading at $17.03, down $0.10 or 0.58%, on a volume of 0.26 million shares on the NYSE. In the past 52 weeks, the stock trended in a broad range of $10.60 - $27.73, with a three-month average of 1.21 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.