Southwest Gas Corp. reports increase in quarterly earnings
Local natural gas utility Southwest Gas Corp. saw an earnings jump in the second quarter, but the gains had little to do with sales growth.
The company’s net income in the period that ended June 30 jumped to $4.1u2007million, or 9 cents per share, compared with a $933,000 loss, or 2 cents a share, in the same quarter of 2010. Revenue came in at $388.5 million, up from $385.8 million a year earlier.
The results beat analysts’ expectations, which StreetInsider.com pegged at a loss of 2 cents a share on revenue of $307 million.
Losses are the norm for Southwest Gas in the second and third quarters, when warm weather means little need for heating.
Company officials said the quarterly earnings didn’t indicate income trends for the entire year.
The quarter’s earnings included income from increases in cash-surrender values of company-owned life insurance policies covering death benefits on key executives who passed away. The increases made up $2.6 million, or 6 cents per share, of the utility’s quarterly net income.
Southwest Gas CEO Jeffrey Shaw noted that the utility is focused on “minimizing cost increases and maintaining the stability of our financial results.”
The company’s operating margin, which is operating revenue minus the cost of gas sold, fell $1 million when compared with the same quarter in 2010 because of warmer-than-average temperatures in late winter and early spring.
The company also noted that it added 14,000 new customers year over year. It serves more than 1.8 million customers in Arizona, Nevada and California, though it won’t break down which states saw the most customer growth until the end of the year.
Southwest Gas released its earnings report after stock markets closed Monday. It ended the day at $32.24 a share on the New York Stock Exchange, down $3.46, or 9.7 percent, from Friday.
Contact reporter Jennifer Robison at jrobison
@reviewjournal.com or 702-380-4512.