Energy services holding company
AGL Resources Inc.'s
) wholly owned affiliate - AGL Capital Corporation - recently
commenced a public offering of senior notes worth $500.0
million. The notes, expected to be guaranteed by AGL
Resources, will carry an interest rate of 4.40% and are set to
mature in 2043.
Management estimates the proceeds from the offering of the senior
notes at roughly $493 million. The amount is expected to be
utilized for corporate activities which include the payment of
short-term debt for the commercial paper program. AGL Resources
expects the offering to close on May 16, 2013.
Recently, AGL Resources reported weaker-than-expected first
quarter 2013 earnings which were hurt by low and volatile natural
gas prices. Earnings per share of $1.31 came in below the Zacks
Consensus Estimate of $1.35. However, compared with the
year-earlier period, AGL Resources' earnings per share rose 12.9%
- from $1.16 (excluding merger-related expenses) to $1.31 - amid
higher energy use on the back of lower-than-expected
temperatures, against the unusually warm winter last year.
Founded in 1856, Atlanta, Ga.-based AGL Resources is an energy
services holding company whose principal business is gas
distribution. Following the Dec 2011 acquisition of Naperville,
Ill.-based Nicor Inc., AGL Resources has become the largest
domestic natural gas-only distribution entity with about 4.5
million customers across seven states.
On the flip side, operating results for AGL Resources are
affected by weather conditions and may vary on a seasonal and
quarterly basis. Natural gas distribution is usually a
temperature-sensitive business with about half of all deliveries
used for space heating. Usually, almost 75% of the deliveries and
sales occur during the six-month period of October through March.
Consequently, milder-than-normal weather conditions in the future
could adversely affect the company's operating results, cash flow
and financial condition.
AGL Resources currently retains a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S.
equity market over the next 1 to 3 months.
In the utility gas distribution sector, three firms that are
expected to outperform the broader U.S. equity market over the
next 1 to 3 months are
Atmos Energy Corporation
Chesapeake Utilities Corporation
Southwest Gas Corporation
). All the three firms currently retain a Zacks Rank #2 (Buy).
ATMOS ENERGY CP (ATO): Free Stock Analysis
CHESAPEAKE UTIL (CPK): Free Stock Analysis
AGL RESOURCES (GAS): Free Stock Analysis
SOUTHWEST GAS (SWX): Free Stock Analysis
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