Southwest profit up — Gabelli still agitating

Friday, April 26, 2002 | 11:13 a.m.

Rate hikes and new customers led to a 27 percent increase in net income for Southwest Gas Corp.'s first quarter.

The Las Vegas-based natural gas utility on Thursday reported net income of $42.9 million, or $1.30 per diluted share, up from $33.8 million, or $1.05 per share, in the year-ago quarter. Revenues rose 2.5 percent to $499.5 million.

The results were a first-quarter record for Southwest. One reason cited by the company were rate hikes; the company received a $19.4 million annual increase from Nevada regulators in December, and a $21.6 million bump from Arizona in November. These boosted operating income by about $15 million, the company said.

Southwest also added 59,000 customers since the year-ago quarter, adding another $5 million. The winter of 2001 was colder than normal, and this offset these gains by about $6 million during the 2002 quarter, the company said. Southwest also reported a one-time gain of $8.9 million, from the sale of undeveloped property in Northern Arizona.

Separately, New York investor Mario Gabelli filed a form with the Securities and Exchange Commission indicating he will again nominate Nevada attorney Michael Melarkey to Southwest's board. Gabelli nominated Melarkey and New York attorney Mark Feldman last year, but only Feldman was elected.

Gabelli, a longtime critic of Southwest management who has argued for measures to increase shareholder value, now controls 3.25 million Southwest shares, giving him 9.93 percent of the company.