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Southwest Gas Corporation Announces First Quarter 2016 Earnings
According to
For the twelve months ended
Natural Gas Operations Segment Results
First Quarter
Operating margin, defined as operating revenues less the cost of gas sold, increased $12 million between quarters. New customers contributed
Operations and maintenance expenses increased
Other income and deductions decreased
Twelve Months to Date
Operating margin increased $22 million between periods including
Operations and maintenance expenses increased
Other income decreased
Construction Services Segment Results
First Quarter
Revenues increased $25 million between quarters, due to incremental work that was able to be completed as a result of favorable weather conditions in several operating areas. Construction expenses increased
Depreciation and amortization expense increased
Twelve Months to Date
Revenues increased $235 million between periods primarily due to additional pipe replacement work in the current period and to a full year of incremental revenues from the companies acquired in October 2014 (
Depreciation and amortization expense increased
Outlook for 2016 – 1st Quarter 2016 Update
Natural Gas Segment:
- Operating margin for 2016 is anticipated to benefit from customer growth (similar to 2015), infrastructure tracker mechanisms, expansion projects, and
California attrition. Combined, these items are expected to produce approximately 3% in incremental margin. Additionally, new rates established to recoverNevada conservation and energy efficiency program costs are expected to increase margin by approximately $11 million, but will be offset by a similar increase in amortization expense. - Operations and maintenance expense is expected to increase modestly as compared to 2015 due to increased general costs, pipeline integrity management and damage prevention programs, and costs associated with customer growth. These increases will be mitigated by a decrease in pension costs. Depreciation and general taxes should increase consistent with the growth in gas plant in service (approximately 5% to 6%) plus the amortization of
Nevada conservation and energy efficiency program costs noted above. - Operating income is expected to increase by 4% to 5% between years.
- Net interest deductions for 2016 are expected to be approximately $5 million to $7 million higher than 2015, primarily due to an anticipated increase in average outstanding debt associated with the financing of capital expenditures.
- Changes in cash surrender values of COLI policies will continue to be subject to volatility. Management generally anticipates longer term normal increases in COLI cash surrender values to range from $3 million to $5 million on an annual basis.
- Capital expenditures in 2016 are estimated at $460 million, in support of customer growth, system improvements, and accelerated pipe replacement programs.
Construction Services Segment:
- Centuri has a strong base of large utility clients (many with multi-year pipe replacement programs) that can sustain and grow its business. Revenues for 2016 are anticipated to be 3% to 7% greater than 2015 levels.
- Operating income is expected to be approximately 5.5% to 6% of revenues.
- Based on the current interest rate environment, net interest deductions for 2016 are expected to be between
$6 .5 million and$7 .5 million. - These collective expectations are before consideration of the portion of earnings attributable to the noncontrolling interests. Additionally, changes in foreign exchange rates could influence results.
This press release may contain statements which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. A number of important factors affecting the business and financial results of the Company could cause actual results to differ materially from those stated in the forward-looking statements. These factors include, but are not limited to, the timing and amount of rate relief, changes in rate design, customer growth rates, the effects of regulation/deregulation, the impacts of construction activity at Centuri, future earnings trends, seasonal patterns, and the impacts of stock market volatility. In addition, the Company can provide no assurance that its discussions about future operating margin, operations and maintenance expenses, operating income, depreciation and general taxes, COLI cash surrender values, financing expenses, and capital expenditures of the natural gas segment will occur. Likewise, the Company can provide no assurance that discussions regarding construction services segment revenues, operating income, and net interest deductions will transpire. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its Web site or otherwise. The Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
SOUTHWEST GAS CONSOLIDATED EARNINGS DIGEST |
||||
(In thousands, except per share amounts) |
||||
QUARTER ENDED MARCH 31, |
2016 |
2015 |
||
Consolidated Operating Revenues |
$ 731,248 |
$ 734,220 |
||
Net Income |
$ 75,446 |
$ 71,983 |
||
Average Number of Common Shares Outstanding |
47,437 |
46,612 |
||
Basic Earnings Per Share |
$ 1.59 |
$ 1.54 |
||
Diluted Earnings Per Share |
$ 1.58 |
$ 1.53 |
||
TWELVE MONTHS ENDED MARCH 31, |
2016 |
2015 |
||
Consolidated Operating Revenues |
$ 2,460,653 |
$ 2,247,531 |
||
Net Income |
$ 141,780 |
$ 142,326 |
||
Average Number of Common Shares Outstanding |
47,196 |
46,537 |
||
Basic Earnings Per Share |
$ 3.00 |
$ 3.06 |
||
Diluted Earnings Per Share |
$ 2.98 |
$ 3.03 |
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SOURCE
Media Contact: Sonya Headen, Las Vegas, NV (702) 364-3411; Shareholder Contact: Ken Kenny, Las Vegas, NV (702) 876-7237