Nicor Inc.’s second-quarter earnings rose 5.7 percent as the natural-gas company continued to see strong results at its distribution business and benefits from prior cost cutting, though demand continued to decline. Still, results beat analysts’ expectations.
Nicor’s performance has improved in recent quarters, thanks to rate increases and cost cutting at its gas business. The company’s tropical-shipping business posted revenue and volume growth in the latest quarter, while its Bahamas and Caribbean markets, which remained under pressure in the first quarter, are still challenged.
Nicor, whose main business is its utility operations centered in northern Illinois, reported a profit of $24.2 million, or 53 cents a share, up from $22.9 million, or 50 cents a share, a year earlier. Analysts polled by Thomson Reuters most recently forecast 44 cents.
Revenue decreased 4.9 percent to $425.6 million, compared with a prior-year drop of 36 percent.
Operating margin climbed to 10.2 percen from 8.8 percent on lower gas costs.
Gas deliveries slid 23 percent, mostly on a decline in Nicor’s residential segment due to warmer weather. Shipping volume fell 16 percent as average sales prices edged down 0.7 percent.
However, Nicor’s profit rose on higher utility rates and lower costs.
Shares of Nicor, which affirmed its 2010 earnings outlook, closed Monday at $44.69 and were inactive premarket.
