Turning around its quarterly earnings to post a gain, Chicago-based Peoples Energy on Friday posted net income for the fourth quarter ended Sept. 30 of $1.7 million, or $0.05 per diluted share, compared with a loss of $13 million, or ($0.37) per share. Peoples beat a Thomson First Call consensus estimate of 2 cents a share for the period.

Peoples reported before special items in both years, fiscal 2002 net income was $99.3 million, or $2.80 per diluted share compared with $111.6 million, or $3.15 per diluted share, in fiscal 2001. Peoples attributed the decrease in fiscal year results to the negative impact of weather, which was 16% warmer than fiscal 2001, and lower pension credits and equity investment income, which together more than offset the benefits of lower operating costs in the Gas Distribution segment and lower interest expense.

“Despite warmer-than-normal weather and several other unusual items that negatively impacted fiscal 2002 results, Peoples Energy can point to a number of significant achievements in 2002,” said Thomas M. Patrick, CEO. “In our core Gas Distribution business, we achieved a modest increase in weather-normalized gas deliveries and continued to make progress in reducing operating costs. In our diversified energy businesses we made solid progress as we successfully brought a new power generation project on line, produced record results from our natural gas hub, grew oil and gas production and reserves, and achieved profitability in retail energy services. Moreover, we significantly strengthened our balance sheet, substantially reducing our debt and accounts receivable.”

Looking forward to fiscal 2003, Patrick said the company continues to estimate that its earnings will be in the range of $2.70 to $2.80 per diluted share, assuming normal weather. “This earnings outlook reflects continued improvement in operating results, offset by lower pension credits and the expiration of oil and gas tax credits. Our financial objectives and strategy remains focused on modest earnings growth from our core Gas Distribution business and increasing contributions from our diversified energy businesses. We also remain committed to maintaining a strong balance sheet and a solid dividend.”

Peoples Energy is comprised of five primary business segments: Gas Distribution, Power Generation, Midstream Services, Retail Energy Services, and Oil and Gas Production. The Gas Distribution business serves about 1 million retail customers in Chicago and northeastern Illinois.

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