Wednesday, energy transportation and distribution company Enbridge Inc. (ENB,ENB.TO) reported a sharp decline in second-quarter profit, driven by significantly lower revenues and the absence of a hefty gain recorded in the prior-year quarter. On an adjusted basis, quarterly earnings increased year-over-year. The company also said that it is on track to achieve the upper half of its full year adjusted earnings guidance range.
Calgary, Canada-based Enbridge posted second-quarter earnings applicable to common shareholders of C$393 million or C$1.08 per share, compared to C$657.7 million or C$1.81 per share in the previous year. Adjusted earnings for the quarter were C$194.5 million or C$0.54 per common share, compared to C$149.5 million or C$0.42 per common share in the same quarter of last year.
Prior-year second quarter results included a C$556.1 million after-tax gain on the sale of the company's interest in Compania Logistica de Hidrocarburos CLH, S.A.
In the preceding first quarter, Enbridge posted earnings applicable to common shareholders of C$558.1 million or C$1.53 per share, compared to C$251.3 million or C$0.70 per share a year ago. Adjusted earnings were C$269.4 million or C$0.74 per share, up from C$238.9 million or C$0.67 per share last year.
Revenues for the quarter under review declined to C$2.87 billion from C$3.87 billion last year. Commodity sales revenue for the quarter declined to C$2.22 billion from C$3.31 billion a year earlier. Revenues from Transportation and other services were C$651.5 million, compared to C$565.9 million in the previous year.
Segment-wise, Liquids Pipelines posted revenues of C$321.8 million, compared to C$269.8 million, while revenues of Gas Pipelines increased to C$103.2 million from C$83.5 million last year. Sponsored Investments revenues were C$77.3 million, compared to C$72.4 million year ago. Revenues of the company's core Gas Distribution and Services segment declined to C$2.35 billion from C$3.44 billion in the previous year.
Commenting on the results, Patrick Daniel, president and chief executive officer of Enbridge said, "Through the second quarter of 2009, Enbridge continued to deliver favourable operating performance across our liquids and natural gas businesses, highlighted by significant progress on our projects under construction, and the announcement of a major new oil sands project."
In the first quarter, the company's revenues declined to C$3.78 billion from C$3.97 billion in the prior year.
For the first six months of the year, Enbridge reported earnings applicable to common shareholders of C$951.1 million or C$2.61 per share, compared to C$909.0 million or C$2.51 per share in the prior year. Adjusted earnings for the first-half were C$463.9 million or C$1.28 per share, compared to C$388.4 million or C$1.08 per share in the same period a year ago.
Revenues for the six months declined to C$6.65 billion from C$7.84 billion a year earlier.
Looking ahead, the company said that it is now on track to achieve the upper half of its C$2.18 to C$2.32 per share full year adjusted earnings guidance range, for an annual growth rate greater than 20%.
"Looking further out, and affirmed through our annual review and update of our strategic plan, we expect to sustain a 10% plus average annual earnings per share growth rate from 2008 through 2013, " said Daniel.
Among others in the industry, TransCanada Corp. (TRP) is slated to report its second quarter results on July 30.
Today in a separate news release, Enbridge announced it has entered into Letters of Intent, or LOI, with Chevron Corp. for an extension of its central Gulf of Mexico offshore pipeline system. Under the terms of the LOI, Enbridge proposes to construct, own and operate the Walker Ridge Gathering System to provide natural gas gathering services to the potential Jack, St. Malo and Big Foot ultra deepwater developments.
ENB is currently trading at $36.22, down $0.27 or 0.74%, on the NYSE. In the past 52-week period, the stock has traded in the range of $26.29 - $44.81.
On the TSX, Enbridge stock is currently trading at C$39.53, up C$0.03 or 0.08%. In the past 52-week period, the stock has traded in the range of C$33.10 - C$45.85.
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