Wednesday, April 30, 2003 | 9:55 a.m.
Southwest Gas Corp. of Las Vegas on Tuesday announced first-quarter net income of $25.5 million, or 76 cents per share, missing wall Street estimates by 35 cents and making good on warnings of lower earnings because of warm winter weather.
The consensus estimate for the quarter was $1.11 per share, Thomson First Call reported.
The results announced Tuesday were well short of the $42.9 million reported for the first quarter of 2002.
"As we disclosed last week, operating results were significantly impacted by unseasonably warm temperatures during the first quarter of 2003," Michael O. Maffie, Southwest Gas president and chief executive, said in a statement.
"While the eastern half of the United States was cold and wet, Nevada experienced its warmest January on record and Arizona its second warmest."
Bob Sullivan, a utilities analyst with UBS Warburg, said the weak results appear to be confined to weather-related issues.
"Clearly, it's the weather," he said. "That's not going to give us any cause for long-term concern."
Standard and Poor's said the results would not affect the company's current BBB- rating, the lowest possible investment-grade rating.
Analysts pointed to the company's effort to improve its financial position despite revenue shortfalls. Last month Southwest Gas refinanced $130 million in debt to take advantage of favorable interest rates.
"Debt refinancing will help the bottom line," said Jake Mercer, an analyst with US Bancorp Piper Jaffray. "On the things they do have control over -- cost cutting, profitability, debt refinancing -- they are doing the right things."
The warm weather was credited with cutting $20 million from the Southwest Gas' revenue, the company said. That loss was offset by a $5 million increase from customer growth.
Southwest Gas serves about 1.5 million customers in Nevada, Arizona and California.
archive
