Energy services holding company AGL Resources Inc. GAS reported strong third-quarter 2015 earnings primarily due to a spurt in commercial activity on the back of favorable natural gas price spreads.
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 adjusted earnings per share of 25 cents. The bottom line beat the Zacks Consensus Estimate of 20 cents and also improved from the year-ago adjusted profit of 22 cents.
AGL Resources Inc. (GAS) - Earnings Surprise | FindTheCompany
However, total operating revenues, at $584 million were slightly below the year-ago figure of $589 million.
Segmental Performance
Distribution Operations: The segment, comprising seven utilities, reported earnings before interest and taxes (EBIT) of $86 million, down from $89 million in the third quarter of 2014.
Retail Operations: Comprising SouthStar Energy Services, Nicor Services, Nicor Solutions and Nicor Advanced Energy, this segment achieved an EBIT of $11 million as against just $5 million a year ago.
Wholesale Services: The unit, which includes Sequent Energy Management, reported earned $18 million for the quarter, turning around from the loss of $7 million incurred in the corresponding period of 2014.
Midstream Operations: This segment, mainly comprising natural gas storage facilities, reported a loss of $16 million, wider than last year’s loss of $4 million.
Operating Expenses
The company’s total operating cost was $525 million, reflecting an increase of 2.1% from $514 million in the year-ago quarter.
Guidance
Management retained the 2015 earnings guidance – excluding wholesale services – at $2.70–$2.80 per share.
Zacks Rank
AGL Resources currently sports a Zacks Rank #3 (Hold).
Meanwhile, one can look at better-ranked players in the same industry like Atmos Energy Corp. ATO, Chesapeake Utilities Corp. CPK and The Laclede Group Inc. LG. All these stocks sport a Zacks Rank #2 (Buy).
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Click to get this free report AGL RESOURCES (GAS): Free Stock Analysis Report CHESAPEAKE UTIL (CPK): Free Stock Analysis Report ATMOS ENERGY CP (ATO): Free Stock Analysis Report LACLEDE GRP INC (LG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research