LAS VEGAS, May 2 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) announced consolidated earnings of $1.14 per basic share for
the first quarter of 2008, a $0.05 decrease from the $1.19 per basic share
earned during the first quarter of 2007. Consolidated net income was $49.2
million, compared to $49.8 million in the prior-year quarter.
According to Jeffrey W. Shaw, Chief Executive Officer, "Our natural gas
operations segment recorded solid operating results in the first quarter of
2008. Cooler temperatures provided additional operating margin, while
operating expense increases were minimized. Customer growth continued to be
affected by a sluggish new construction housing market as the inventory of
unoccupied homes remained high in our service territories. Also, our
construction services segment experienced a small loss during the first
quarter due to unfavorable winter weather conditions and the continued slow
down in the housing market. We believe this phenomenon is temporary and
that construction results will improve as we move through the warmer
weather seasons and the housing construction market stabilizes." Shaw
closed with a discussion of the Company's ongoing rate case proceedings in
Arizona and California indicating, "The cases remain on track, with
hearings in each jurisdiction scheduled to be held this summer. We remain
cautiously optimistic that fair outcomes will be achieved before the winter
heating season in Arizona, and by year end in California."
For the twelve months ended March 31, 2008, consolidated net income was
$82.6 million, or $1.94 per basic share, compared to $89.4 million, or
$2.17 per basic share, during the twelve-month period ended March 31, 2007.
The prior twelve-month results included approximately $0.07 per share
related to a nonrecurring property tax benefit recognized in the second
quarter of 2006.
Natural Gas Operations Segment Results
First Quarter
Operating margin, defined as operating revenues less the cost of gas
sold, increased approximately $8 million, or three percent, in the first
quarter of 2008 compared to the first quarter of 2007. Differences in
heating demand, caused primarily by weather variations, accounted for $5
million of the increase in operating margin as overall temperatures in the
first half of the current quarter were somewhat colder compared to the more
normal levels experienced in the first quarter of 2007. Rate relief added
$1 million and customer growth contributed $2 million toward the operating
margin increase as the Company added 20,000 customers during the last
twelve months, an increase of one percent.
Operating expenses for the quarter increased $2.5 million, or two
percent, compared to the first quarter of 2007 primarily due to general
cost increases, higher uncollectible expenses, and incremental operating
costs associated with serving additional customers. Labor efficiencies,
primarily from the ongoing electronic meter reading project, mitigated the
increase in operating expenses. Other income decreased $2.9 million
primarily due to negative returns on long-term investments and lower
interest income on declining deferred purchased gas adjustment (PGA)
receivable balances. Net financing costs were relatively flat between
periods.
Twelve Months to Date
Operating margin increased $21 million, or three percent, between
periods. Rate changes accounted for $11 million of the increase and
customer growth contributed $10 million. Warmer-than-normal temperatures
were experienced during both twelve-month periods (each with estimated
negative impacts to operating margin of approximately $7 million),
resulting in no incremental impact between the periods.
Operating expenses increased $16.9 million, or three percent, between
periods primarily due to general increases in labor and maintenance costs,
higher uncollectible expenses, and incremental operating costs associated
with serving additional customers, partially offset by labor efficiencies
primarily from the ongoing electronic meter reading project. The prior
twelve-month period included a nonrecurring property tax benefit.
Other income decreased $6.5 million primarily due to negative returns
on long-term investments and lower interest income on declining deferred
PGA balance receivables. In addition, other income for the prior-year
period included approximately $1 million of interest income related to the
property tax benefit. Net financing costs between periods increased $1.9
million, or two percent, primarily due to interest expense associated with
higher deferred PGA balance payables and higher rates on variable-rate
debt.
Southwest Gas Corporation provides natural gas service to 1,819,000
customers in Arizona, Nevada, and California.
This press release may contain statements which constitute
"forward-looking statements" within the meaning of the Private 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, conditions in the
housing market, the effects of regulation/deregulation, the timing and
amount of rate relief, and changes in rate design.
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST
(In thousands, except per share amounts)
QUARTER ENDED MARCH 31, 2008 2007
Consolidated Operating Revenues $813,607 $793,716
Net Income $49,152 $49,764
Average Number of Common Shares Outstanding 43,012 41,979
Basic Earnings Per Share $1.14 $1.19
Diluted Earnings Per Share $1.14 $1.17
TWELVE MONTHS ENDED MARCH 31, 2008 2007
Consolidated Operating Revenues $2,171,979 $2,141,533
Net Income $82,634 $89,444
Average Number of Common Shares Outstanding 42,592 41,179
Basic Earnings Per Share $1.94 $2.17
Diluted Earnings Per Share $1.92 $2.15
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
CONTACT:
media, Cynthia Messina, +1-702-876-7132, or
investors, Ken Kenny, +1-702-876-7237, both of Southwest Gas
Corporation
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