NiSource Inc. (NI) reported net operating earnings of 72 cents per share in the first quarter of 2010, which was above the Zacks Consensus Estimate of 68 cents and last year’s profit of 62 cents. The results reflect improved net revenues in NiSource’s Gas Transmission & Storage and Electric Operations businesses. The increase is also attributed to a modest rise in industrial and residential demand in Indiana partially due to the economic recovery.
By segment, earnings increased 13% and 77%, respectively, at the company’s Gas Transmission & Storage and the Electrical Operations segments, but declined 1% at the Gas Distribution segment.
Gross operating revenue in the reported quarter declined 16% year over year to $2.1 billion. Total Net revenues, including cost of sales, improved 0.4% to $1.1 billion.
In the press release, management highlighted a steady progress on NiSource’s key business priorities, including the advancement of customer service, reliability, and regulatory initiatives at Northern Indiana Public Service Company (NIPSCO), development of an array of natural gas transmission and storage growth opportunities linked to NiSource’s extensive asset footprint in the Marcellus Shale region of Appalachia, and advancing infrastructure and regulatory programs at the company’s natural gas utilities.
Going forward, NiSource will continue to aggressively focus on its core business strategy of synchronizing infrastructure investment with appropriate regulatory and commercial activities. The company reiterated its target of achieving 3% to 5% earnings growth in the long term.
For 2010, the company reaffirmed its net operating earnings guidance in the range of $1.10 to $1.20 per share. Management notes that the company’s liquidity position remains strong following a series of initiatives taken in 2009 to address the company’s long-term financing needs through 2011. Given this improved liquidity and deep inventory of investment opportunities, the company is projecting a capex of $900 million for 2010, up 12.5% from 2009 capex levels.
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