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Southwest Gas Corporation Reports Third Quarter 2015 Results
According to
For the twelve months ended
Natural Gas Operations Segment Results
Third Quarter
Operating margin, defined as operating revenues less the cost of gas sold, increased $2 million between quarters. New customers contributed $1 million in operating margin during the third quarter of 2015, as approximately 26,000 net new customers were added during the last twelve months. Rate relief totaling $1 million provided the remainder of the increase.
Operations and maintenance expenses increased
Other income and deductions, which principally includes changes in the cash surrender values of company-owned life insurance ("COLI") policies and non-utility expenses, decreased $4 million between quarters. The current quarter reflects a
Twelve Months to Date
Operating margin increased $11 million between periods including a combined $5 million of rate relief in the
Operations and maintenance expenses decreased
Other income decreased
Construction Services Segment Results
Third Quarter
Revenues increased
Depreciation and amortization expense increased
Twelve Months to Date
Revenues increased
Depreciation and amortization expense increased
Outlook for Full-Year 2015
Natural Gas Segment:
- Operating margin for the full year 2015 is expected to increase nearly 2% compared to 2014. Margin from customer growth should be similar to 2014. Incremental margin from
California and Paiute rate case decisions, as well as new rates associated with infrastructure programs, collectively should approximate the customer growth amount. - Overall, operating expenses are anticipated to increase approximately 3% compared to 2014. Operations and maintenance expense will be negatively impacted by higher pension costs and other employee-related expenses. Depreciation and general taxes combined should increase consistent with the growth in gas plant in service.
- As a result, operating income for 2015 is forecast to fall about 1% to 2% from the
$241.6 million recognized during 2014. - COLI cash surrender value changes continue to be subject to volatility, and through September, the Company has experienced a decrease (loss) of
$2.6 million . More recently, during October, equity markets have rebounded, reversing previously experienced losses. Management cannot predict whether full-year COLI results will reflect income or a loss. Longer-term normal changes in COLI cash surrender values are expected to range from$3 million to $5 million of income on an annual basis. - Net interest deductions for 2015 are expected to be approximately
$4 million less than the$68 million recorded in calendar-year 2014, primarily as a result of IDRB redemptions.
Construction Services Segment:
- Integration efforts are now largely complete.
- Revenues are expected to approximate
$950 million , which is at the low end of our range of$950 million to $1 billion , due in part to the strong U.S. dollar relative to the Canadian dollar. - Operating income is expected to be approximately 6% of revenues, excluding revenue of
$18 million and a loss reserve of$7.7 million associated with the industrial construction project inCanada . - Net interest deductions are estimated to be approximately
$8 million . - Collective expectations above are before consideration of earnings attributable to noncontrolling interests.
- Based on the above forecast, contribution to net income, assuming no recovery on the loss contract before year-end, is estimated to range between
$22 million and $25 million .
Preliminary 2016 Outlook
- The natural gas segment is anticipated to grow margin mainly through customer growth, infrastructure tracker mechanisms, expansion projects, and
California attrition. Expectations are that operating expenses (excluding any impacts positively or negatively from pension expense) and interest expense will likely offset the anticipated improvement in margin. - Centuri has a platform that can sustain and grow its business with a strong base of utility clients, with multi-year pipe replacement programs, and as a result, revenues are anticipated to be 7% to 10% greater than expected 2015 revenues.
- Centuri's operating income is expected to be approximately 5.5% to 6% of revenues.
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, conditions in the housing market, 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, operating expenses, operating income, COLI cash surrender values, and financing expenses of the natural gas segment will occur. Likewise, the Company can provide no assurance that discussions regarding construction services segment revenues, operating income, interest deductions, and contribution to net income 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 SEPTEMBER 30, |
2015 |
2014 |
||
Consolidated Operating Revenues |
$ 505,396 |
$ 432,475 |
||
Net Income (Loss) |
$ (4,734) |
$ 1,970 |
||
Average Number of Common Shares Outstanding |
47,102 |
46,513 |
||
Earnings (Loss) Per Share |
$ (0.10) |
$ 0.04 |
||
Diluted Earnings (Loss) Per Share |
$ (0.10) |
$ 0.04 |
||
NINE MONTHS ENDED SEPTEMBER 30, |
2015 |
2014 |
||
Consolidated Operating Revenues |
$ 1,778,220 |
$ 1,494,024 |
||
Net Income |
$ 72,198 |
$ 82,380 |
||
Average Number of Common Shares Outstanding |
46,863 |
46,485 |
||
Basic Earnings Per Share |
$ 1.54 |
$ 1.77 |
||
Diluted Earnings Per Share |
$ 1.53 |
$ 1.76 |
||
TWELVE MONTHS ENDED SEPTEMBER 30, |
2015 |
2014 |
||
Consolidated Operating Revenues |
$ 2,405,903 |
$ 2,032,381 |
||
Net Income |
$ 130,944 |
$ 139,683 |
||
Average Number of Common Shares Outstanding |
46,777 |
46,451 |
||
Basic Earnings Per Share |
$ 2.80 |
$ 3.01 |
||
Diluted Earnings Per Share |
$ 2.77 |
$ 2.98 |
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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