Energy services holding company AGL Resources Inc. (GAS) reported strong fourth-quarter 2014 earnings on higher customer demand for natural gas, following considerably colder than normal temperature. This was, however, partially offset by increased operating expenses. AGL Resources – the largest domestic natural gas-only distribution entity with about 4.5 million customers across seven states following the Dec 2011 acquisition of Naperville, IL-based Nicor Inc. – announced earnings per share (EPS) of $1.24 (from continuing operations). The bottom line surpassed the Zacks Consensus Estimate of 79 cents and improved from the year-ago adjusted figure of 61 cents. Total operating revenues, at $1,445 million, were up from the year-ago level of $1,218 million. For the year ended Dec 31, 2014, AGL Resources’ per share adjusted profits of $4.71 beat the Zacks Consensus Estimate of $4.24 and improved from the 2013 adjusted earnings of $2.45 per share. Operating revenues of $5,385 million were 28% higher than the prior-year level. Segmental Performance Distribution Operations: The segment, comprising seven utilities, reported earnings before interest and taxes (EBIT) of $153 million, down from $159 million in the fourth quarter of 2013. The decline in results was partially offset by higher customer demand. Retail Operations: Comprising SouthStar Energy Services, Nicor Services, Nicor Solutions and Nicor Advanced Energy, this segment’s EBIT was $30 million against $46 million in the year-earlier quarter. The weakness stemmed from hedging losses from mark-to-market activities. Wholesale Services: The unit, which includes Sequent Energy Management, reported profits of $114 million against the year-ago loss of $27 million. Excellent commercial activity drove the segment’s results. Cooler temperature increased customer demand for natural gas which in turn favored the segment. Midstream Operations: This segment, comprising mainly natural gas storage facilities, reported a loss of $3 million, narrower than the prior-year loss of $27 million. An extremely cold weather drove the segment’s improvement. Operating Expenses The company’s total operating cost was recorded at $1,158 million, reflecting an increase of 10% from $1,052 million in the year-ago quarter. Guidance Management has initiated 2015 EPS guidance of $2.70–$2.90. Zacks Rank AGL Resources currently carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months. Meanwhile, better-ranked players in the energy sector include InterOil Corporation (IOC), Golar LNG Partners LP (GMLP) and Tesoro Corporation (TSO). InterOil and Golar LNG sport a Zacks Rank #1 (Strong Buy) while Tesoro carries a Zacks Rank #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TESORO CORP (TSO): Free Stock Analysis Report AGL RESOURCES (GAS): Free Stock Analysis Report INTEROIL CORP (IOC): Free Stock Analysis Report GOLAR LNG PARTN (GMLP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
|