SWX Beats Q2 Earnings Estimates, Lags Sales - Analyst Blog
Southwest Gas Corporation (SWX) reported
second-quarter 2013 pro forma earnings per share of 22 cents,
beating the Zacks Consensus Estimate by 15 cents. Quarterly
earnings increased substantially from the prior-year loss of 8
cents per share.
The improvement in earnings was primarily driven by a rise in
revenues, higher contribution from the company’s subsidiary NPL
Construction Co., a decline in interest expenses and higher income
from the company-owned life insurance.
Revenue
In the quarter under review, Southwest Gas’ total revenues were
$411.6 million, missing the Zacks Consensus Estimate by $11.4
million.
However, quarterly revenues increased 0.4% year over year due to
higher sales at the company’s Construction
Services segment; partially offset by lower
Natural Gas Operations’ revenues.
Operational Update
Southwest Gas’ total operating expenses were $382.7 million, down
3% year over year mainly due to a decline in net cost of gas sold.
The decline in operating expenses was partially offset by an
increase in operations and maintenance, depreciation and
amortization expenses, and higher construction expenses and taxes
(other than income taxes) and more than offset by an increase in
revenues.
In the reported quarter, operating margin increased to 7% from 3.8%
in the year-ago quarter.
Southwest Gas’ net interest deductions totaled $15.3 million, down
16.4% year over year.
Financial Update
As of Jun 30, 2013, Southwest Gas’ cash balance was $17.7 million
versus $25.5 million as of Dec 31, 2012.
Long-term debt (less current maturities) as of Jun 30, 2013 was
$1,256.3 million versus $1,268.4 million as of Dec 31, 2012.
Southwest Gas’ net cash provided by operating activities during the
first six months of 2013 was $215.2 million compared with $261.5
million in the prior-year comparable period.
In the first six months of 2013, the company's capital expenditure
was $152 million compared with $176.4 million in the year-ago
period.
Other Company Releases
AGL Resources Inc.’s (GAS) second-quarter 2013 pro
forma earnings per share of 41 cents beat the Zacks Consensus
Estimate by 14 cents.
MDU Resources Group Inc. (MDU) announced
second-quarter 2013 operating earnings of 25 cents per share,
missing the Zacks Consensus Estimate by a penny.
Questar Corporation (STR) reported second-quarter
2013 earnings per share of 22 cents, in line with the Zacks
Consensus Estimate.
Our Take
It is evident from the last quarter that Southwest Gas is in the
process of adding new customers. In the second quarter of 2013, the
company recorded an additional $2 million in its operating margin
by virtue of adding roughly 24,000 new customers during the last
twelve months. We believe continuous growth in customer headcounts
will help the company to improve its future performance.
Las Vegas-based Southwest Gas is engaged in purchasing,
distributing and transporting natural gas in Arizona, Nevada and
California. The company currently has a Zacks Rank #4 (Sell).
AGL RESOURCES (GAS): Free Stock Analysis Report
MDU RESOURCES (MDU): Free Stock Analysis Report
QUESTAR (STR): Free Stock Analysis Report
SOUTHWEST GAS (SWX): Free Stock Analysis Report
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