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Piedmont Natural Gas (PNY) today announced results for its third quarter ended July 31, 2012. For the quarter, the Company reported a seasonal loss of $4.6 million or ($.06) per diluted share compared with a loss of $8.7 million or ($.12) per diluted share for the same period in 2011. For the nine months ended July 31, 2012, net income was $121.8 million and diluted earnings per share were $1.69, compared with net income of $123.1 million and diluted earnings per share of $1.70 for the same period in 2011.
Utility margin increased by $4.5 million for the quarter and decreased by $6.3 million for the nine months ended July 31, 2012 compared to the same periods in 2011. The increase in margin for the quarter was primarily due to customer growth in the Company’s residential and commercial markets, increased base rates in Tennessee and increased services in its power generation markets. For the nine months ended July 31, 2012, utility margin declined primarily due to substantially warmer winter weather compared to the same nine months of the prior year and reduced opportunities in the secondary wholesale markets. Margin decreases for the nine months were partially offset by customer growth.
Operations and maintenance expenses increased by $5.9 million and $14.8 million for the three- and nine-month periods ended July 31, 2012, respectively, compared to the same periods in 2011. For both periods, the increase is primarily due to higher payroll, contract labor expenses incurred in process improvement and pipeline safety activities, and in employee benefits expenses.
Pre-tax income from equity method investments was $3.3 million for the three months ended July 31, 2012, compared with $2.4 million for the same period in 2011. The increase for the quarter is primarily due to improved performance from SouthStar due to lower gas costs and from Cardinal Pipeline due to an expansion project for customers. For the nine months ended July 31, 2012, pre-tax income from equity method investments was $21.2 million compared with $22.5 million for the same period in 2011 due to warmer weather in the markets served by SouthStar partially offset by improved performance by Cardinal Pipeline.
Fiscal 2012 Earnings Guidance Reaffirmed with Revised Emphasis Toward Middle of Range
Piedmont Natural Gas reaffirms its fiscal year 2012 earnings guidance of $1.58 to $1.68 per diluted share with a revised emphasis toward the middle of the range.
Conference Call
In conjunction with this third-quarter earnings release, you are invited to listen to the conference call that will be broadcast live over the Internet on Monday, September 10, 2012, at 11:00 a.m. Eastern Time, hosted by Chairman, President and Chief Executive Officer Thomas E. Skains. Log on to the web at www.piedmontng.com and click on Investors, then on Presentations. The conference call will be archived on the Presentations page of the website within the Investors section.
Piedmont Natural Gas Company, Inc.
Summary of Operations
(in thousands except per share amounts and degree days)
Three Months Ended July 31 % Increase
2012 2011 (Decrease)
(Unaudited) (Unaudited)
Operating Revenues $161,123 $197,274 (18)%
Cost of Gas 74,663 115,311 (35)%
Margin 86,460 81,963 5%
Operations and Maintenance Expenses 59,248 53,351 11%
Depreciation 25,532 26,128 (2)%
General Taxes 8,275 9,206 (10)%
Utility Income Taxes (4,082) (7,111) 43%
Operating Income (Loss) (2,513) 389 (746)%
Other Income (Expense), net 1,977 2,286 (14)%
Utility Interest Charges 4,077 11,378 (64)%
Net Loss (4,613) (8,703) 47%
Average Shares of Common Stock:
Basic 71,936 72,007 -%
Diluted 71,936 72,007 -%
Earnings Per Share of Common Stock:
Basic ($0.06) ($0.12) 50%
Diluted ($0.06) ($0.12) 50%
System Throughput - Dekatherms 71,543 60,243 19%
Gas Customers Billed in July 969 960 1 %
System Average Degree Days - Actual 13 58 (78)%
System Average Degree Days - Normal 49 50 (2)%
Percent Normal Degree Days 27% 116% -
Nine Months Ended July 31 % Increase
2012 2011 (Decrease)
(Unaudited) (Unaudited)
Operating Revenues $941,395 $1,241,897 (24)%
Cost of Gas 462,748 756,997 (39)%
Margin 478,647 484,900 (1)%
Operations and Maintenance Expenses 178,155 163,344 9%
Depreciation 76,980 76,601 -%
General Taxes 26,196 29,767 (12)%
Utility Income Taxes 71,228 71,003 -%
Operating Income 126,088 144,185 (13)%
Other Income (Expense) 12,664 14,219 (11)%
Utility Interest Charges 16,946 35,259 (52)%
Net Income $121,806 $123,145 (1)%
Average Shares of Common Stock:
Basic 71,933 72,010 -%
Diluted 72,233 72,235 -%
Earnings Per Share of Common Stock:
Basic $1.69 $1.71 (1)%
Diluted $1.69 $1.70 (1)%
System Throughput - Dekatherms 241,972 223,663 8%
Gas Customers Billed in July 969 960 1%
System Average Degree Days - Actual 2,446 3,410 (28)%
System Average Degree Days - Normal 3,111 3,115 -%
Percent Normal Degree Days 79% 110% -
Forward-Looking Statement
This press release contains forward-looking statements. These statements are based on management’s current expectations and information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to future events, risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ from anticipated results include, but are not limited to, weather conditions, rate of customer growth, the cost and availability of natural gas, competition from other energy providers, new legislation and regulations and application of existing laws and regulations, economic and capital market conditions, the cost and availability of labor and materials and other uncertainties, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "should," "could," "assume," "can," "estimate," "forecast," "future," "indicate," "outlook," "plan," "predict," "seek," "target," "would," and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only as of the date they are made and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in Piedmont’s latest Forms 10-K and 10-Q, which are available on the SEC’s website at http://www.sec.gov.
About Piedmont Natural Gas
Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee, including 53,000 customers served by municipalities who are wholesale customers. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, interstate natural gas storage and intrastate natural gas transportation. More information about Piedmont Natural Gas is available on the Internet at http://www.piedmontng.com/.
SOURCE Piedmont Natural Gas
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