Oil and gas producer El Paso Corp. (EP) on Friday reported a net loss for the first quarter, compared to a profit in the year-ago period, hurt primarily by full-cost ceiling test charges at the company's exploration and production segment, based on lower natural gas prices at the end of the quarter. Excluding charges, adjusted earnings per share for the quarter surged 42% due to realized gains on oil and natural gas hedges as well as continued pipeline growth.
First-Quarter Results
For the first quarter, the Houston, Texas-based company's net loss attributable to common stockholders was $978 million, or $1.41 per share, compared to net income of $200 million, or $0.29 per share, in the same period last year.
The results for the latest quarter include non-cash, full-cost ceiling test charges of $1.3 billion after-tax, or $1.92 per share. Adjusted earnings for the quarter were $0.47 per share, up 42% from $0.33 per share in the year-ago quarter, due to realized gains on oil and natural gas hedges as well as continued pipeline growth. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
Operating revenues for the quarter were $1.48 billion, up 16.5% from $1.27 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $1.26 billion for the quarter.
The company reported operating loss for the quarter of $1.27 billion, compared to operating income of $550 million a year ago.
The company's production volumes for the quarter averaged 803 million cubic feet equivalent per day, or MMcfe/d, including 72 MMcfe/d of unconsolidated affiliate volumes. The prior-year quarter's production volumes averaged 886 MMcfe/d, including 75 MMcfe/d of unconsolidated affiliate volumes.
Peer Performance
On Thursday, DCP Midstream Partners LP (DPM) reported a net loss attributable to partners of $22.1 million, or $0.67 per unit for the first quarter, compared to a loss of $6.5 million or $0.36 per unit in the prior-year quarter. Total operating revenues declined to $240.6 million from $337.7 million in the preceding year quarter.
In April, Williams Companies, Inc. (WMB) reported a net loss for the first quarter compared to a profit in the year-ago period, hurt by charges related to the company's operations in Venezuela as well as lower commodity prices in the quarter. For the first quarter, the company reported a net loss attributable to the company of $172 million, or $0.30 per share, compared to net income of $500 million, or $0.84 per share in the year-ago quarter.
Segmental Results
El Paso's Pipeline Group segment's earnings before interest expense and income taxes, or EBIT, for the quarter were $396 million, up 4% from $381 million in the year-ago period. The results for the latest quarter benefited primarily from incremental revenues from several expansion projects that went into service in 2008 and higher capacity sales in the Rocky Mountain region and on the El Paso Natural Gas Pipeline as well as Tennessee Gas Pipeline systems. Revenue for the segment increased to $733 million from $720 million a year ago.
The exploration & production segment reported EBIT loss of $1.69 billion for the quarter, compared with EBIT of $242 million a year ago. EBIT for the latest quarter includes $2.1 billion of non-cash, full-cost ceiling test charges primarily in the company's domestic full cost pool, which was based on lower domestic spot natural gas prices at the end of the quarter. Revenue for the segment increased to $700 million, from $603 million in the year-ago period.
The marketing segment reported EBIT of $52 million for the quarter, compared with an EBIT loss of $60 million for the same period last year. Results for the quarter reflect an improvement in the value of natural gas and power derivative contracts principally due to the adoption of new accounting guidance relating to determining the fair value of derivative liabilities that have third party credit enhancements associated with them. The segment reported revenues of $53 million for the quarter, compared to negative revenues of $57 million in the same period last year. The company's power segment reported EBIT of $4 million, compared with EBIT loss of $2 million a year ago. In the latest quarter, the company sold its interest in the Porto Velho power generation facility in Brazil for $101 million in cash and $78 million in notes. This sale completed the company's exit from the power business in Brazil.
The company' "corporate and other" segment reported EBIT loss of $7 million for the quarter, compared with EBIT of $39 million in the year-ago period. The year-ago quarter's results were positively impacted by a $65 million reduction of the company's liability related to the indemnification of medical benefits for retirees of the Case Corporation, offset by a $43 million MTM loss related to changes in fair value of a legacy indemnification from the sale of an ammonia facility.
Stock Quotes
EP closed Thursday's regular trading session at $7.67, down $0.12 on a volume of 8.15 million shares. In Friday's pre-market trading, the stock is trading at $8.14 0.47 6.13%. In the past 52 weeks, the stock has been trading in a range of $5.22-$22.47.
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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.