Coming one day after the Federal Trade Commission (FTC) signed off on its acquisition of the Panhandle pipeline from CMS Energy Corp., Southern Union Co. upped its earnings guidance for 2003 and 2004. Following the news the company’s shares climbed 6.5% on Friday to close at $16.30.

In its announcement, the company said it expects fiscal year 2004 consolidated earnings guidance of $1.35-1.50 per share, reflecting the concurrent public offerings announced on May 29 and the consummation of the acquisition of Panhandle Eastern Pipe Line Co. and its subsidiaries.

Under its existing shelf registration statement, Southern Union said it will offer 8.25 million newly issued shares of common stock, as well as $125 million of equity units. The company said it expects to use the net proceeds from the offerings to fund a portion of its Panhandle acquisition, reduce debt and for general corporate purposes. On the same day as the stock offering, Southern Union received the FTC’s conditional approval on its $1.8 billion purchase of the Panhandle pipeline from CMS Energy (see Daily GPI, May 30).

For 2003, Southern Union said it currently expects earnings for the fiscal year to arrive at or near the low end of the previously announced range of $1.00-1.10 per share, before taking into account the gain on the sale of its Texas operations, which were unloaded in January to Oneok Inc. (see Daily GPI, Oct. 17, 2002).

However, Southern Union said its projected range includes all other items under generally accepted accounting principles, including payments received in settlement of the Southwest Gas litigation. Including the anticipated $0.32 per share gain on the sale of the Texas operations, the same range for 2003 would be $1.32-1.42 per share.

Southern Union distributes natural gas to approximately 1 million customers through its operating divisions in Missouri, Pennsylvania, Rhode Island and Massachusetts. The company also owns and operates electric generating facilities in Pennsylvania.

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