The oil and natural gas bust beginning in 2015 was worse than many thought, fueling a spike in the U.S. default rate that rivaled the telecom industry collapse in the early 2000s, both in recorded bankruptcies and low creditor recoveries, Moody’s Investor Service said.
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Dominion signed an agreement to sell 100% of its Dominion Telecom unit to a subsidiary of Elantic Networks Inc. Terms of the transaction were not disclosed. However, Dominion expects to take a loss of up to $30 million related to the sale, which is expected to close in the second quarter. The sale is subject to review or approval by the Federal Communications Commission and regulators in 11 states.
Consolidated Edison (Con Edison) reported a 58% drop in net income in the fourth quarter of 2003 to $50 million (21 cents/share) mainly because of one-time charges related to its unregulated telecommunications and generation businesses. It reported an 18% drop in net income for the year, but the utility company said earnings from continuing operations rose 22% to $146 million (65 cents/share) in the fourth quarter and slipped only 7% to $624 million ($2.83/share) for the year.
In the new economy, while energy-intensive industrial businesslags, the growing information technology (IT) and telecom sectors”should account for an increasingly large piece of the total energypie,” according to an industry analysis report released by J.P.Morgan. And some will profit more than others, the financial giantsaid, in naming seven natural gas-based companies the winners inthe new market.
Seeking increased growth opportunities, Citizens Utilities ofStamford, CT, is getting out of the business of distributing gas,electricity and water in order to invest in telecommunications. Thecompany is divesting its Public Services distribution businesses,as well as its wastewater treatment business. As previouslyannounced, Citizens plans to fund $2.3 billion of telephone accessline acquisitions with sale proceeds.
Representatives of the major utility industries, natural gas,electricity and telecommunications, met in Houston this week tojointly address Y2K issues. Gary Gardner, chief information officerof the American Gas Association (AGA) cited interlocking activitiesas the basis for the meeting. For instance electricity powers manyof the pipeline compressor stations that keep the natural gasflowing. “Although gas companies have manual overrides that can beused in the event of an electrical power shortage or outage, fieldpersonnel posted at the compressor stations will rely ontelecommunications devices to communicate with their headquarters.