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AGL Profits Should Top Estimates
Atlanta's natural gas utility holding company, AGL Resources Inc., whose stock prices have fallen nearly 14% in the past year, said last week that cost cutting and more customers will push third-quarter profits ahead of analysts' estimates. AGL was expected to earn 21 cents a share in the three months ending last Friday (June 30), the average estimate of several analysts polled by First Call/Thomson Financial.
In November 1998, the state of Georgia deregulated its gas sales, which moved AGL's Atlanta Gas Light Co. to change its focus and begin to zero in on delivery and turn away from supply. The change appears to have been a good one. Already, the growing utility --- now the largest gas distributor in the Southeast --- has added about 1.5 million customers as Atlanta's population grows, and more businesses and homes turn to natural gas.
Company officials attributed the strength of predicted earnings to "aggressive cost management, system modernization and growth in the customer base." The 2000 earnings do not include gains AGL is expected to record following Heritage Propane Partner's proposed acquisition of US Propane, a joint venture that includes AGL.
Third quarter earnings are expected to be announced July 27. For the same period in 1999, AGL posted a net income of $7.2 million, or 12 cents. This year, First Call predicts the company will earn $1.12 for fiscal 2000, and $1.20 in fiscal 2001.
Carolyn Davis, Houston
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