Chicago-based Peoples Energy said Wednesday it still expects to reach its profit target this year, but second quarter earnings will be down 15-20% from a year ago. Analysts had been forecasting a 10% decline in quarterly earnings.

Full-year 2004 earnings should reach $2.70-2.85/share on “stronger than expected” results from its oil and gas production and retail businesses, which will offset weakness in the regulated Gas Distribution business. The Gas Distribution business serves about 1 million retail customers in Chicago and northeastern Illinois, and its earnings have been negatively impacted by warmer than normal weather. Weather for the quarter was 5.2% or 176 degree days warmer than last year, the company said in a statement.

“Despite lower results in our Gas Distribution business, we continue to believe that we can achieve our original target for the fiscal year of $2.70 to $2.85 per share,” said CFO Thomas A. Nardi. “Our diversified business segments are performing extremely well, and operating results from this group are expected to increase more than 30% over fiscal 2003, driven mainly by our oil and gas production and retail businesses.”

Peoples is scheduled to release its quarterly earnings on April 23.

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