Southwest Gas gets earnings boost in fourth quarter
A 2009 rate increase and cooler temperatures helped local natural-gas utility Southwest Gas boost its earnings in the fourth quarter.
The company's net income in the quarter that ended Dec. 31 jumped to $46.4 million, or $1.03 per share, compared with $31.2 million, or 71 cents per share, in the same quarter of 2008. Quarterly revenue was $498.8 million, down from $509.4 million a year earlier.
Southwest Gas Chief Executive Officer Jeffrey Shaw said in a statement that higher heating demand added $11 million to the utility's operating margin, which consists of operating revenue minus the cost of gas sold. An Oct. 1 increase in the rates that cover operational costs added $2 million to the company's operating margin, though the rates the company charges consumers directly for fuel dropped. That decline resulted in a 2.5 percent overall decrease in the average winter gas bill, which now typically runs $72.56.
The utility also released its 2009 results, which showed net income of $87.5 million, or $1.95 a share, up from $61 million, or $1.40 a share, in 2008. Revenue came in at $1.9 billion, down from $2.1 billion in 2008.
"Improved earnings and cash flows, a decrease in capital expenditures, improvements in rate design and sensible cost controls have all combined to strengthen our financial position, despite the current economic downturn," Shaw said. "We will continue to focus on the core fundamentals of our business to make further improvements."
Southwest Gas released its earnings after financial markets closed Thursday. The company's shares rose 3 cents, or 0.1 percent, to close at $28.69 on the New York Stock Exchange.
Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.
