LAS VEGAS, May 2 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) announced consolidated earnings of $1.12 per basic share for
the first quarter of 2006, a $0.24 increase from the $0.88 per basic share
earned during the first quarter of 2005. Consolidated net income was $44.2
million, compared to $32.8 million in the prior period.
According to Jeffrey W. Shaw, Chief Executive Officer, "The improvement
in earnings primarily reflects higher operating margin resulting from
customer growth, the recognition of one month of the Arizona general rate
increase, and slightly better (but still warmer-than-normal) weather. In
addition, our construction services subsidiary turned in another strong
performance. With this solid start, we optimistically look forward to a
year of improved earnings results."
For the twelve months ended March 31, 2006, consolidated net income was
$55.2 million, or $1.42 per basic share, compared to $48.6 million, or
$1.35 per basic share, during the twelve-month period ended March 31, 2005.
Results for the current twelve-month period include a $10 million, or $0.16
per share, nonrecurring charge recorded in the fourth quarter of 2005
related to an injuries and damages incident.
Natural Gas Operations Segment Results
First Quarter
Operating margin, defined as operating revenues less the cost of gas
sold, increased approximately $20 million, or ten percent, in the first
quarter of 2006 compared to the first quarter of 2005. During the last
twelve months, the Company added 86,000 customers (excluding 19,000
customers acquired April 2005 in South Lake Tahoe), an increase of five
percent. New and acquired customers, coupled with additional amounts from
existing transportation and nonweather-sensitive sales customers,
contributed an incremental $14 million in operating margin during the
quarter. Rate relief in Arizona added $5 million in operating margin
compared to the prior year. Differences in heating demand caused primarily
by weather variations between periods resulted in a $1 million operating
margin increase as warmer-than-normal temperatures were experienced during
both periods. During the current quarter, operating margin was negatively
impacted by $9 million, and in the prior-year quarter, the negative impact
was $10 million.
Operating expenses for the quarter increased $5.7 million, or five
percent, compared to the first quarter of 2005 primarily due to general
cost increases and incremental operating costs associated with serving
additional customers. Net financing costs increased $2.1 million, or ten
percent, between periods primarily due to an increase in average debt
outstanding (to help finance growth and the higher unrecovered purchased
gas adjustment (PGA) balance) and higher rates on variable-rate debt.
Income tax expense in the first quarter of 2006 includes a nonrecurring
$1.7 million state income tax benefit.
Twelve Months to Date
Operating margin increased $37 million between periods. Customer growth
contributed an incremental $29 million and rate relief in all service
territories added $12 million. Differences in heating demand caused
primarily by weather variations between periods resulted in a $4 million
operating margin decrease as warmer-than-normal temperatures were
experienced during both periods. During the current period, operating
margin was negatively impacted by $18 million, and in the prior period, the
negative impact was $14 million.
Operating expenses increased $31.5 million, or seven percent, between
periods reflecting general increases in labor and maintenance costs, and
incremental operating costs associated with serving additional customers.
The $10 million nonrecurring injuries and damages charge is a significant
component of the increase. Net financing costs rose $4.3 million, or five
percent, between periods primarily due to an increase in average debt
outstanding to help finance growth and higher rates on variable-rate debt.
Other income improved $4.2 million primarily due to higher returns on
long-term investments and increased interest income on higher deferred PGA
balances.
Southwest Gas Corporation provides natural gas service to 1,737,000
customers in Arizona, Nevada, and California. Its service territories are
centered in the fastest-growing region of the country.
This press release may contain statements which constitute "forward-
looking statements" within the meaning of the Securities Litigation Reform
Act of 1995 (Reform Act). All such forward-looking statements are intended
to be subject to the safe harbor protection provided by the Reform Act. A
number of important factors affecting the business and financial results of
the Company could cause actual results to differ materially from those
stated in the forward-looking statements. These factors include, but are
not limited to, the impact of weather variations on customer usage,
customer growth rates, changes in natural gas prices, the ability to
recover costs through the PGA mechanism, the effects of
regulation/deregulation, the timing and amount of rate relief, changes in
rate design, changes in gas procurement practices, changes in capital
requirements and funding, the impact of conditions in the capital markets
on financing costs, changes in construction expenditures and financing,
changes in operations and maintenance expenses, future liability claims,
changes in pipeline capacity for the transportation of gas and related
costs, acquisitions and management's plans related thereto, competition,
and the ability to raise capital in external financings. In addition, the
Company can provide no assurance that its discussions regarding certain
trends relating to its financing, operations, and maintenance expenses will
continue in future periods.
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST
(In thousands, except per share amounts)
QUARTER ENDED MARCH 31, 2006 2005
Consolidated Operating Revenues $676,941 $542,880
Net Income $44,180 $32,829
Average Number of Common Shares Outstanding 39,492 37,097
Basic Earnings Per Share $1.12 $0.88
Diluted Earnings Per Share $1.11 $0.88
TWELVE MONTHS ENDED MARCH 31, 2006 2005
Consolidated Operating Revenues $1,848,344 $1,546,540
Net Income $55,174 $48,560
Average Number of Common Shares Outstanding 38,722 35,869
Basic Earnings Per Share $1.42 $1.35
Diluted Earnings Per Share $1.41 $1.34
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
CONTACT:
Media, Cynthia Messina, +1-702-876-7132, or
Shareholders, Ken Kenny, +1-702-876-7237, both of Southwest Gas
Corporation
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