Southwest Gas reports loss in second quarter

Local natural-gas utility Southwest Gas Corp. posted a loss in the quarter that ended June 30.

The company's net loss was $933,000, or 2 cents per share, compared with $594,000, or 1 cent per share, in the same quarter a year earlier. Quarterly revenue came in at $385.8 million, down from $387.6 million in the second quarter of 2009.

The quarter included a $3.7 million decrease in the cash-surrender values of company-owned life insurance. That decline was worth 8 cents a share. The same period in 2009 brought a $3.7 million gain in surrender values of life-insurance policies, which added 8 cents a share.

The company's operating margin, defined as operating revenue minus the cost of gas sold, grew by $8 million in the quarter, while operating expenses were flat. Financing costs fell $1.6 million, and the company's construction-services subsidiary improved its results by $1 million.

The company said in a statement that net losses in the second and third quarters, when heating demand is low, are normal and "not generally indicative of earnings for a complete 12-month period."

Chief Executive Officer Jeffrey Shaw said the company's executives are pleased with the second quarter's results. He noted that Moody's upgraded the utility's credit rating from Baa3 to Baa2, and Fitch and Standard & Poor's revised the company's credit rating from stable to positive.

"It's gratifying to achieve these affirmative changes in such challenging economic conditions," Shaw said.