LAS VEGAS, Nov. 6 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) recorded a net loss of $0.22 per share for the third quarter of
2007, a $0.04 improvement from the loss of $0.26 per share recorded during
the third quarter of 2006. Net loss for the third quarter of 2007 was $9.3
million, compared to a loss of $10.7 million in the prior period. 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, "Although
quarterly results improved, much of the improvement is attributable to a
reallocation of operating margin between periods in our California
jurisdictions (from the first quarter into the second and third quarters).
After adjusting for the reallocation, incremental operating margin from
rate relief and customer growth totaled approximately $2 million in the
current quarter, whereas operating costs increased by $5 million. Customer
growth continues to moderate as the Company added 48,000 customers over the
past 12 months."
Looking ahead, Shaw noted, "We recently filed a $50 million general
rate increase request in Arizona to help recover rising operating costs and
infrastructure investments. We are also supporting rate design changes
which, if approved, would encourage energy efficiency and also shield the
Company and its customers from weather-related volatility. We hope to have
new rates in place in about a year."
For the twelve months ended September 30, 2007, consolidated net income
was $86.8 million, or $2.06 per basic share, compared to $67.4 million, or
$1.69 per basic share, during the twelve-month period ended September 30,
2006. Results for the prior twelve-month period include net nonrecurring
charges of approximately $0.09 per share.
Natural Gas Operations Segment Results
Third Quarter
Operating margin, defined as operating revenues less the cost of gas
sold, increased $8 million, or seven percent, in the third quarter of 2007
compared to the third quarter of 2006. Rate changes (primarily from
implementing a California equalized margin tracker mechanism, effective
January 2007) accounted for $7 million of the increase in operating margin
compared to the prior year. New customers accounted for the remaining
incremental operating margin during the quarter as the Company added 48,000
customers during the last twelve months, an increase of three percent.
Operating expenses for the quarter increased $5 million, or four
percent, compared to the third quarter of 2006 primarily due to general
cost increases and incremental operating costs associated with serving
additional customers. A reduction in property tax rates mitigated the
overall operating expense increase.
Net financing costs increased $1.2 million between periods primarily
due to higher rates on variable-rate debt and interest expense associated
with deferred purchased gas cost balances.
Twelve Months to Date
Operating margin increased $61 million between periods. Rate relief in
Arizona and California added $31 million. Customer growth contributed an
incremental $16 million. Differences in heating demand, caused primarily by
weather variations, resulted in a $14 million increase in operating margin
as warmer-than-normal temperatures were experienced during both periods
(during the current twelve-month period the negative impact was $7 million,
while the negative impact during the prior twelve-month period was $21
million).
Operating expenses increased $28.5 million, or six percent, between
periods primarily due to general increases in labor and maintenance costs,
and incremental operating costs associated with serving additional
customers. Higher uncollectible and employee-related costs also contributed
to the increase. Net financing costs increased slightly between periods
primarily due to higher rates on variable-rate debt.
Southwest Gas Corporation provides natural gas service to approximately
1,800,000 customers in Arizona, Nevada, and California. Its service
territory is 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, 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 SEPTEMBER 30, 2007 2006
Consolidated Operating Revenues $371,524 $351,800
Net Loss $9,318 $10,736
Average Number of Common Shares Outstanding 42,448 40,982
Loss Per Share $0.22 $0.26
NINE MONTHS ENDED SEPTEMBER 30, 2007 2006
Consolidated Operating Revenues $1,591,777 $1,459,643
Net Income $40,109 $37,153
Average Number of Common Shares Outstanding 42,219 40,221
Basic Earnings Per Share $0.95 $0.92
Diluted Earnings Per Share $0.94 $0.91
TWELVE MONTHS ENDED SEPTEMBER 30, 2007 2006
Consolidated Operating Revenues $2,156,892 $1,956,638
Net Income $86,816 $67,408
Average Number of Common Shares Outstanding 42,060 39,957
Basic Earnings Per Share $2.06 $1.69
Diluted Earnings Per Share $2.04 $1.67
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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