NiSource 4Q profit falls 63%

By Dow Jones Newswires
Posted Feb. 1 at 7:05 a.m.

NiSource Inc.’s fourth-quarter earnings fell 63 percent amid early debt-extinguishment losses as the regional utility reported higher-than-expected revenue.

The Midwest and Northeast electricity and natural gas utility has benefitted from cost cutting and improving demand in some of its markets last year. Its industrial volume received a boost as the manufacturing sector rebounded last year.

The company’s gas transmission and storage unit has been moving ahead on infrastructure projects in the Marcellus Shale, including projects in Pennsylvania and New York. Oil and gas companies are making big bets on alternative shale plays such as the Marcellus on expectations demand will increase for cleaner burning fuels.

The bonanza had led to sharply higher supplies and historically low prices for natural gas that have cut some power producers’ costs.

NiSource reported a profit of $33.4 million, or 12 cents a share, down from $89.5 million, or 32 cents a share, a year earlier. Excluding early debt-extinguishment loss, restructuring-related costs and other items, net operating earnings fell to 33 cents from 36 cents.

Revenue increased 4.1% to $1.75 billion after slumping 30% a year earlier.

Analysts polled by Thomson Reuters most recently forecast earnings of 34 cents on revenue of $1.58 billion.

Its electricity unit saw the top line improve 6.3 percent amid stronger volume. Gas distribution, its largest segment by revenue, reported revenue grew 16 percent.

For the new year, the company projected earnings of $1.25 to $1.35 a share, while analysts forecast $1.31. President and Chief Executive Robert C. Skaggs Jr. said the outlook “continues to be premised on a relatively modest and gradual economic recovery across the markets served by its utilities.”

Shares closed Monday at $18.62 and were inactive premarket. The stock is up 25 percent in the past year.

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