Energy services holding company
AGL Resources Inc.
) provided its outlook for the third quarter ending September 30,
2012. The company expects earnings to be in the range of $2.60 per
diluted share to $2.75 per diluted share for 2012, which is lower
than their previous estimate.
ATMOS ENERGY CP (ATO): Free Stock Analysis
AGL RESOURCES (GAS): Free Stock Analysis Report
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AGL expects lower earnings in the third quarter due to changes in
natural gas prices. To hedge its natural gas storage stock, the
company deals in natural gas futures which suffered pre-tax hedge
losses of $16 million or $0.08 per diluted share in its wholesale
The company expects to recover the losses in the fourth quarter of
2012 and the first quarter of 2013 with the help of hedging
instruments that are settled by withdrawing natural gas stock and
delivering to customers.
Although company's wholesale service segment generated good
economic outcome during the first three quarters but fluctuating
natural gas prices will have an effect on the company's earnings.
Natural gas distribution is usually a temperature-sensitive
business with about half of all deliveries used for space heating.
Consequently, milder-than-normal weather conditions in the future
could adversely affect the company's operating results, cash flow
and financial condition.
Atlanta, Georgia-based AGL Resources is an energy services holding
company, whose principal business is gas distribution. Apart from
the core distribution operations, AGL Resources is also engaged in
other activities that include retail operations, wholesale
services, midstream operations, energy services, cargo shipping and
liquefied natural gas (LNG) and propane.
AGL Resources - one of the major distributors of natural gas in the
nation along with the likes of
Atmos Energy Corp.
) - currently retains a Zacks #2 Rank (short-term Buy rating).