Citing a number of factors affecting the energy industry currently, Bedminster, NJ-based NUI Corp. reported earnings from continuing operations of $16.7 million ($1.18 per share) for the second quarter ended March 31, compared to $18.3 million ($1.41 per share) for the same quarter last year. Despite the decline, the company said it is not changing its current guidance of $1.80 – $1.90 per share for fiscal 2002, excluding the effect of the change in accounting and all non-recurring and discontinued items.

“A number of external factors, such as record warm temperatures, a sluggish economy, and extremely weak demand in the telecommunications equipment market, have presented major challenges for a number of our businesses to overcome,” said John Kean Jr., NUI CEO. “Despite these factors, we have made significant progress on many strategic fronts. We further strengthened our balance sheet by completing a very successful equity offering, our billing and mapping unit, Utility Business Services, was awarded a significant contract, our telecom business added to its customer base through the acquisition of another firm’s customer base and we made solid progress in the development and expansion of our hub strategy.”

As previously announced, NUI has elected early adoption of Statement of Financial Accounting Standard No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets” (“SFAS 144”). Under SFAS 144, NUI’s Valley Cities (PA) and Waverly (NY) natural gas divisions and TIC Enterprises (“TIC”), the company’s sales outsourcing unit, are now reported as discontinued operations. Net income, including discontinued operations, for the second quarter was $15.1 million ($1.06 per share), compared to $14.8 million ($1.14 per share) last year. The company issued an additional 1.725 million shares of common stock in March 2002.

The company reported that total operating margins for the second quarter rose $2.6 million, or 3.7%, to $72.6 million, primarily due to the addition in this year’s quarterly results of Virginia Gas, which was purchased in March 2001. NUI said consolidated earnings before interest and taxes (EBIT) declined $2.9 million, or 7.9%, to $33.9 million as a result of operation and maintenance expenses outpacing the increase in corporate margins for this period.

Due to a warmer than normal winter in service territories of NUI’s natural gas divisions, distribution services’ margin decreased $1.6 million to $61.7 million, as compared to $63.3 million the prior year. In New Jersey, where NUI’s largest natural gas distribution division is located, temperatures averaged 18% warmer than the prior year and 22% warmer than normal. The company said it believes that the warmer temperatures lowered margins for this segment by approximately $3.8 million, which was partially offset by the successful conclusion of a rate increase at City Gas Company of Florida and core market and industrial growth. EBIT for distribution services decreased $2.4 million, or 7%, to $32.2 million during the second quarter.

NUI’s wholesale energy marketing and trading segment, which includes NUI’s trading and portfolio management business, as well as the storage and pipeline activities of Virginia Gas, grew second quarter margins by $1.4 million, or 32.2%, to $5.5 million, due to the addition of Virginia Gas. Due to lower volatility during this year’s second quarter, NUI Energy Brokers, the company’s trading and portfolio management business, reported slightly lower trading margins than the previous year. Second quarter EBIT for the segment rose $0.2 million to $2.9 million, due to the addition of Virginia Gas.

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.