In a long awaited restatement of first quarter income, El Paso Corp. reported a loss of $206 million (32 cents/share), compared with a restated loss of $431 million (72 cents) in 1Q2003. The company is revising its earnings numbers through 2001, and it expects to file the second quarter restatement by the end of November.

The Houston-based pipeline company said the loss from continuing operations in the first quarter was 23 cents/share compared with 33 cents in 1Q2003. Revenues were $1.59 billion, down from $1.85 billion.

In the first quarter, El Paso’s losses in its merchant energy business fell to $172 million from $434 million in 1Q2003. The merchant power business reported revised income of $139 billion from $196 billion in 1Q2003. And the exploration and production unit, rocked with a 41% revision of reserves in March, posted quarterly earnings of $95 million, compared with $449 million a year earlier. The unit carried a $130 million charge related to the sale of its Canadian properties and also saw income fall on the reduced oil and gas volumes. The pipeline unit, which continues to be the backbone of the company, reported earnings fell to $386 million from $429 million in 1Q2003 as fuel volumes declined.

In the Securities and Exchange Commission filing, El Paso said the restatement of 2001 results could bring it into default under financing agreements linked to $748 million in outstanding debt. However, the company noted that it expected to repay the notes when they matured, which was Sunday (Oct. 31).

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