Results aren’t going to be as pretty as had been expected this fiscal year, ending Oct. 31, North Carolina’s Piedmont Natural Gas said, but customers are coming back as gas prices go down, and the distributor is looking for better times ahead.
Piedmont said its fiscal year-end results will come in between $2.00 and $2.10 per share, below previous predictions, but above last year’s $1.87, before special items. The Charlotte-based natural gas distributor estimates earnings per share between $2.10 and $2.20 for the fiscal year ending Oct. 31, 2002.
The company’s business is seasonal and it normally reports losses for both the third and fourth fiscal quarters. For the three months ended July 31, 2001, it expects to report a third quarter loss between $0.35 and $0.40 per share compared with a loss of $0.32 for the similar prior period the prior year, due primarily to the effects of weather and reduced customer consumption patterns. Third and fourth quarter margin represents approximately 27% of the company’s annual margin.
“General economic conditions and higher wholesale natural gas costs have adversely affected our near-term utility operating performance,” commented Ware Schiefer, CEO. “As a result, our charge-offs for non- paying customers have been higher than normal this year. Many of our customers have also been conserving and consuming less natural gas than normal in response to the economic slow-down and higher gas costs. Some industrial load was lost this past winter to lower-priced industrial fuels. Cooler-than-normal summer weather in our area has also caused a reduction in the volumes of natural gas delivered for electric power generation.”
“On the positive side, the steady decline in wholesale gas costs since last winter’s peak is encouraging and bodes well for our business and our customers. Industrial customers who switched to other fuels earlier in the year are coming back to natural gas as we regain our traditional competitive price advantage. Despite higher gas costs and a weaker economy this year, Piedmont continues to experience strong customer growth. Although down slightly from traditional levels, our 4.5% customer addition growth rate is still three times the national average,” Schiefer said.
“Additionally, residential customers who have been disconnected generally clear their outstanding balances in time to reconnect service for the winter heating season. By then, wholesale gas costs are expected to be well below those of last year, and winter gas service should be more affordable for all classes of customers,” he said.
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