Midstream natural gas sales moved 22% higher, but Dallas-based Crosstex Energy Inc. reported Tuesday that its second quarter income fell nearly 28%, to $1.7 million (14 cents/share), down from $2.4 million (19 cents) in 2Q2004. Revenue was $630.9 million, well ahead of $516.1 million reported a year ago.
Earnings fell short of Thomson First Call estimates, which had expected, on average, for the company to earn 17 cents/share. However, investors were undeterred, sending the share price up 6.7% to end the day at $62.70.
Crosstex’s profit on energy trading activities fell to $399,000 in the quarter, compared with $826,000 a year ago. In the first six months of 2005, energy trading profit fell to $444,000 from $1.246 million in the first half of 2004.
Crosstex owns a 51% interest in and the incentive distribution rights of Crosstex Energy LP, a midstream natural gas company, which operates more than 4,500 miles of pipeline, five processing plants, and approximately 100 natural gas amine treating plants. Crosstex currently provides services for approximately 1.9 Bcf/d of natural gas.
On Monday, Crosstex announced it had purchased El Paso Corp.’s South Louisiana midstream assets for $500 million (see Daily GPI, Aug. 9). Crosstex plans to finance the acquisition with 50% debt and 50% equity. It also expects the acquisition to be immediately accretive to earnings.
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