Southwest Gas Corp. Friday reported net income increased by 12.6 percent in the first quarter as the company benefited from a return to normal winter weather and two months at higher rates in Arizona.
First quarter net income rose to $49.8 million from $44.2 million last year. Earnings per share climbed to $1.17 from $1.11 in the first quarter last year.
“The increase in earnings between quarters reflects the recognition of two additional months of Arizona rate relief that went into effect March 1, 2006, and a return to more normal temperatures overall,” said Chief Executive Officer Jeff Shaw.
“The solid operating performance in the first quarter of 2007 is a continuation of the improvements made in 2006, which resulted in the first increase in the common stock dividend in 13 years,” he said.
“Managing weather risk continues to be a challenge for us,” he said.
“We experienced both extremes during the quarter — a cold January and hot March — and remain resolute in our need to continue working with regulators to improve the level and stability of earnings and cash flows going forward,” Shaw said.
Operating revenues stepped up to $793.7 million from $676.9 million last year.
Operating margin, which is operating revenues less the cost of gas sold, widened by $22 million or 11 percent in the first quarter, compared to a year ago.
Rate increases in California and Arizona added $8 million to the operating margins. Heating demand added another $8 million increase in operating margin as temperatures for the quarter fell to normal levels.
New customers brought a $6 million increment in operating margin. The company’s customer numbers increased by 62,000 or 4 percent over the last 12 months.
Over the 12 months ending March 31, the company earned $89.4 million, up from $55.2 million in the prior period. Earnings per share increased to $2.15 from $1.41 for the previous 12 months.
Shares in Southwest Gas have steadily appreciated by 43 percent over the last year. The closed Friday declined 14 cents to $39.29, close to the 52-week high of $39.68.