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Analyst lowers estimates

Friday, Aug. 3, 2001 | 11 a.m.

UBS Warburg utilities analyst Ronald Barone has lowered his earnings estimates on Southwest Gas Corp. of Las Vegas, following "weaker than expected performance" in the quarter ending June 30.

Barone decreased his 2001 earnings estimate from $1.40 to $1.35 per share. This implies net income of $43.1 million for the year, down from earlier estimates of $44.7 million, based on Southwest's 31.9 million shares outstanding.

Southwest's strong customer growth rate and "attractiveness as an acquisition candidate" justify a higher valuation than other natural gas companies, Barone said. However, even if Southwest is valued at a 20 percent premium to peer companies, the 12-month target price is just $24 per share -- offering virtually no return over current levels. Barone repeated a "hold" rating on the stock.

Southwest fell 48 cents to $23.90 this morning.

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