First-quarter earnings flat for Southwest Gas

Southwest Gas Corp., a utility that provides natural-gas service for Las Vegans, reported today that its earnings stayed flat in the first quarter.

Southwest Gas posted income of $50 million, or $1.13 a share, in the quarter that ended March 31. That’s roughly even with $49.2 million, or $1.14 a share, in the same quarter a year earlier.

The drop in earnings per share came from a rise in the amount of outstanding company stock. It had revenue of $689.9 million, down from $813.6 million a year ago.

Jeffrey Shaw, chief executive officer of Southwest Gas, said in a statement that the utility managed to control operating costs, improve its capital structure and reduce financing costs. But a mild winter and recession-related efforts among to consumers to conserve on utility bills pared the company’s operating margin, which measures operating revenue minus the cost of gas the company sold.

Income fell in the 12 months prior to March 31 as well, the company reported. Income in the year was $61.8 million, or $1.41 a share, down from $82.6 million, or $1.94 a share, in the year that ended March 31, 2008.

The difference in earnings came largely from warmer weather, less income from the company’s construction-services subsidiary and charges related to big drops in values of company-owned life insurance policies.

Also today, the utility filed its deferred energy account adjustment application with the state’s Public Utilities Commission. With the filing, commissioners will review the company’s fuel costs and reconcile them with rates customers paid. The filing could reduce the average customer’s bill by about 60 cents a month, said Southwest Gas spokeswoman Cynthia Messina.

Southwest Gas also has a general rate case before the Public Utilities Commission.

The utility filed the case, its first general rate case in five years, in April. It’s asking commissioners for a 5.9 percent bump in residential rates beginning Nov. 1. If the commission approves the case, rates for the average household would rise $3.78 a month, from $53.97 to $57.75. Business rates vary, but the typical strip-mall store would see monthly rates go from $51.54 to $56.53.

General rate cases let utilities recover operating costs, while deferred-energy cases involve strictly fuel costs passed directly to consumers, with no profits allowed.

Southwest Gas released its earnings after the markets closed. The company’s shares rose 7 cents, or 0.35 percent, today to close at $20.28 on the New York Stock Exchange.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.