AGL Resources Inc. blamed lower volatility in the natural gas market for a dip in earnings from its Sequent Energy marketing division in the third quarter. The firm said Monday that its third quarter 2007 earnings results are expected to be 16-18 cents/basic share, which is predicted to bring in full-year earnings for 2007 at the lower end of its previously announced guidance of $2.75-2.85/basic share.

“The reduction in natural gas price volatility has limited Sequent’s opportunity to generate margins from storage and transportation arbitrage,” AGL said. It expects Sequent’s contribution “will be below the 2007 EBIT (earnings before interest and taxes) contribution range included in the company’s previously announced earnings guidance, but will be partially offset by improved results in the company’s other business segments.”

The company’s other business units have remained strong, said AGL President John W. Somerhalder II. “While our other business units, including our core utility business, have seen strong year-to-date results and remain on track to meet or exceed our expectations, we clearly have seen and continue to see a lack of volatility in the natural gas markets that has impacted Sequent’s ability to generate economic value.” While the company does not usually issue pre-earnings release warnings, Somerhalder said it was important to keep stakeholders fully informed.

In the 2006 third quarter Sequent drove earnings of $36 million, or 46 cents/basic share, compared with $15 million, or 19 cents/basic share, reported for the same period in 2005. The 2006 earnings spike was “due primarily to higher earnings in the company’s wholesale services segment,” executives said at the time.

The expectation for 2007 earnings assumes normal winter weather conditions and natural gas prices in the fourth quarter. On Thursday, Nov. 1, AGL 3Q earnings will be released prior to the market opening, followed by a conference call and webcast with the investor community at 9 a.m. ET. The webcast can be accessed via the investor relations section of the AGL Resources website at

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