LAS VEGAS, Aug. 6 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) recorded a net loss of $0.06 per basic share for the second
quarter of 2008, compared to a loss of $0.01 per basic share recorded
during the second quarter of 2007. Consolidated net loss was $2.7 million,
compared to a loss of $337,000 in the prior-year quarter. Due to the
seasonal nature of the business, net losses during the second and third
quarters are normal and not generally indicative of earnings for a complete
twelve-month period.
According to Jeffrey W. Shaw, Chief Executive Officer, "Given the
current, challenging economic environment, we were encouraged with the
overall operating results for the quarter. However, both our gas operations
and construction services segments were negatively impacted by the new
construction market slowdown. In addition, the quarterly net loss reflected
negative returns on long-term investments related to stock market declines.
Looking ahead, we believe we are poised for improvement when currently
vacant homes become occupied (and customers begin taking service) and as
market returns recover." Shaw also noted that, "rate case hearings
concluded during the quarter in the Company's Arizona general rate case
application, and hearings are scheduled later this summer in our California
general rate case. 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 June 30, 2008, consolidated net income was
$80.2 million, or $1.87 per basic share, compared to $85.4 million, or
$2.05 per basic share, during the twelve-month period ended June 30, 2007.
Natural Gas Operations Segment Results
Second Quarter
Operating margin, defined as operating revenues less the cost of gas
sold, increased approximately $2.6 million, or two percent, in the second
quarter of 2008 compared to the second quarter of 2007. Customer growth
contributed $2 million toward the operating margin increase as the Company
added 19,000 customers during the last twelve months, an increase of one
percent. Weather changes between periods accounted for the remaining
increase.
Operating expenses for the quarter increased $2.4 million, or two
percent, compared to the second quarter of 2007 primarily due to general
cost increases, higher uncollectible expenses, and incremental operating
costs associated with serving additional customers. Labor efficiencies,
resulting primarily from the conversion to electronic meter reading,
mitigated the increase in operating expenses. Other income, which
principally includes interest income, long-term investment returns, and
non-utility expenses, decreased $4.3 million between periods. This was
primarily due to negative returns on long-term investments in the current
quarter versus positive returns in the prior year's quarter. Net financing
costs were relatively flat between periods.
Twelve Months to Date
Operating margin increased $17 million, or two percent, between
periods. Rate changes accounted for $9 million of the increase and customer
growth contributed $8 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 $6.3 million, or one 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
resulting primarily from the electronic meter reading conversion.
Other income decreased $12.5 million between periods primarily due to
negative returns on long-term investments in the current twelve-month
period (versus favorable returns in the prior-year period) and lower
interest income due to the full recovery of previously deferred purchased
gas cost receivables. The prior-year period also included non-recurring
gains on dispositions of miscellaneous properties. Net financing costs
between periods increased $1.4 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 JUNE 30, 2008 2007
Consolidated Operating Revenues $ 447,304 $ 426,537
Net Loss $ 2,725 $ 337
Average Number of Common Shares Outstanding 43,324 42,226
Basic Loss Per Share $ 0.06 $ 0.01
SIX MONTHS ENDED JUNE 30, 2008 2007
Consolidated Operating Revenues $ 1,260,911 $ 1,220,253
Net Income $ 46,427 $ 49,427
Average Number of Common Shares Outstanding 43,168 42,103
Basic Earnings Per Share $ 1.08 $ 1.17
Diluted Earnings Per Share $ 1.07 $ 1.16
TWELVE MONTHS ENDED JUNE 30, 2008 2007
Consolidated Operating Revenues $ 2,192,746 $ 2,137,168
Net Income $ 80,246 $ 85,398
Average Number of Common Shares Outstanding 42,865 41,691
Basic Earnings Per Share $ 1.87 $ 2.05
Diluted Earnings Per Share $ 1.86 $ 2.03
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
CONTACT:
Media Contact, Cynthia Messina,
+1-702-876-7132, or Shareholder Contact, Ken Kenny,
+1-702-876-7237, both of Southwest Gas Corporation
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