Keyspan Fires On All Cylinders In 2000
Keyspan Corp. announced last week that its consolidated earnings for the year 2000 before restructuring charges soared above 1999 levels.
The company posted earnings of $323.8 million ($2.21 per share), compared to 1999's mark of $223.9 million ($1.62 per share). The $41.1 million one-time restructuring charge came primarily from Keyspan's acquisition of Northeast distributors, Eastern Enterprises and EnergyNorth, during November. The charge reduced earnings to $282.7 million ($2.10 per share) (see NGI, Nov. 13, 2000).
The company also reported a strong fourth quarter, recording consolidated earnings of $100 million ($0.74 per share) before restructuring charges, versus $74.7 million ($0.56 per share) in the same period of 1999.
Including restructuring charges, Keyspan's quarterly earnings dropped below 1999 levels to $58.9 million ($0.44 per share).
"We are pleased that our 2000 earnings, excluding restructuring charges, were 79 cents, or 49% higher than 1999," said Robert B. Catell, CEO of Keyspan. "All of our business segments performed exceptionally well. In addition, we successfully completed the acquisitions of Eastern Enterprises and EnergyNorth, and achieved profitability in our energy services business on schedule."
The gas distribution business that serves New York City and New England led the company's earnings in 1999 and 2000. The segment produced earnings of $187.3 million ($1.39 per share), compared to $151.2 million ($1.09 per share) in 1999. The company attributed the 5% increase to the record number of customers converting to gas from oil in the New York area, as well as the two months of earnings from its newly acquired New England businesses.
Keyspan said gas exploration and production operations resulting primarily from its 70% ownership in the Houston Exploration Co. contributed a record $58.2 million ($0.43 per share) to consolidated earnings in 2000, compared to the segment's $15.8 million ($0.11 per share) for 1999. The company said the segment's earnings reflected a 60% increase in gas prices and a 12% increase in production over the year. In the fourth quarter, the segment contributed $28.8 million ($0.21 per share), versus $6.5 million ($0.5 per share) for the fouth quarter 1999. The company said the growth reflects a 97% increase in gas prices and an 11% increase in production.
" "Conversions from oil to natural gas in New England and on Long Island are expected to continue at a healthy pace," said Catell. We maintain a rigorous budget process to control costs and expect to achieve our synergy savings target. As a result, we expect to earn between $2.60 to $2.65 per share in 2001."
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