NGI The Weekly Gas Market Report
Keyspan Corp. announced yesterday that its consolidated earningsfor the year 2000 before restructuring charges skyrocketed above 1999levels. The company posted earnings of $323.8 million ($2.21 pershare), compared to 1999’s mark of $223.9 million ($1.62 pershare). The $41.1 million one-time restructuring charge came primarilyfrom Keyspan’s acquisition of Northeast distributors EasternEnterprises and EnergyNorth during November. The charge reducedearnings to $282.7 million ($2.10 per share) (see Daily GPI, Nov. 10, 2000).
The company also reported a strong fourth quarter, recordingconsolidated earnings of $100 million ($0.74 per share) beforerestructuring charges, versus $74.7 million ($0.56 per share) inthe same period of 1999. Including restructuring charges, Keyspan’squarterly earnings drop below 1999 levels to $58.9 million ($0.44per share).
“We are pleased that our 2000 earnings, excluding restructuringcharges, were 79 cents, or 49% higher than 1999,” said Robert B.Catell, CEO of Keyspan. “All of our business segments performedexceptionally well. In addition, we successfully completed theacquisitions of Eastern Enterprises and EnergyNorth, and achievedprofitability in our energy services business on schedule. Bydelivering on our promises, we have laid the foundation forcontinued success in 2001. We are also very aware of the impactthat rising gas commodity costs are having on our customers. Wehave taken every step possible to minimize the increase in ourcustomers’ bills, including diversifying our energy supplyportfolio and reducing our operating costs.”
The gas distribution business that serves New York City and NewEngland led the company’s earnings in 1999 and 2000. The segmentproduced earnings of $187.3 million ($1.39 per share), compared to$151.2 million ($1.09 per share) in 1999. The company attributedthe 5% increase to the record number of customers converting to gasfrom oil in the New York area, as well as the two months ofearnings from its newly acquired New England businesses.
Keyspan said gas exploration and production operations resultingprimarily from its 70% ownership in the Houston Exploration Co.contributed a record $58.2 million ($0.43 per share) toconsolidated earnings in 2000, compared to the segment’s $15.8million ($0.11 per share) for 1999. The company said the segment’searnings reflected a 60% increase in gas prices and a 12% increasein production over the year. In the fourth quarter, the segmentcontributed $28.8 million ($0.21 per share), versus $6.5 million($0.5 per share) for the fouth quarter 1999. The company said thegrowth reflects a 97% increase in gas prices and an 11% increase inproduction.
“All our business segments have a positive outlook and should beable to build upon this year’s strong performance,” said Catell.”Conversions from oil to natural gas in New England and on LongIsland are expected to continue at a healthy pace. We maintain arigorous budget process to control costs and expect to achieve oursynergy savings target. As a result, we expect to earn between$2.60 to $2.65 per share in 2001.”
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