) posted net operating earnings of 44 cents per share in the
fourth quarter of 2012, in line with the Zacks Consensus Estimate
but above the year-ago quarter's operating earnings of 32 cents
The 2012 operating earnings of $1.46 per share surpassed the
Zacks Consensus Estimate by a penny. The results were 10.6% ahead
of the Zacks Consensus Estimate.
The improvement in earnings was attributable to the consistent
infrastructure investments of the company. The progress made in
its Gas Transportation and Storage business enabled a better
performance from the prior year.
NiSource recorded GAAP earnings of $1.41 per share for 2012
compared with $1.05 per share in the previous year. The
difference of 3 cents between operating and GAAP earnings during
the financial year was due to certain one-time items.
Gross revenue during the quarter declined 2.8% year over year to
$1,399.7 million from $1,439.7 million. The decline was mainly
due to lower contribution from the Gas Distribution segment which
decreased 20.3%, offset partially by a 9.2% improvement in
Electric Operations and 16.0% increase in the Gas Transportation
and Storage revenue.
The quarter's revenue missed the Zacks Consensus Estimate by
NiSource's total revenue for 2012 was $5,070 million down 11.9%
from $5,756.3 million reported in the prior year. In spite of the
higher contribution from Gas Transportation and Storage, Electric
Operations and Corporate and Other Operations, the year-over-year
decline was due to a dull Gas Distribution segment.
2012 revenue also lagged the Zacks Consensus Estimate by 6.3%.
Highlights of the Release
In 2012, cost of sales was 30% of total revenue against 40.5% in
2011. Lower input cost had a favorable impact on the margins of
the company despite a 0.7% increase in total operating expenses
in 2012 from the 2011 levels.
Operating earnings from the Gas Distribution segment in 2012 was
$397.8 million, up 10.5% from the prior year on consistent
investment. In 2012, NiSource made capital investment worth $650
million in this business segment and plans to repeat the same in
The new projects which were put into service in 2012 from the Gas
Transportation and Storage business yielded positive results. The
joint ventures with other industry operators will aid the company
to better its performance in 2013. NiSource expects to invest
$700 million in this segment in 2013.
The operating income of the company was $1.07 billion, up 13.2%
from the 2011 levels.
The interest expenses of the company in 2012 were $418.3 million,
up 11% from the prior year mainly due to new debts issued by the
As of Dec 31, 2012, NiSource had cash and cash equivalents of
$36.3 million, down from $11.5 million as of Dec 31, 2011.
Long-term debts (excluding the debts due within a year) of the
company as of Dec 2012, were $6,819.1 million versus $6,267.1
million as of Dec 31, 2011. During the year, the company issued
new long-term debt worth $991.4 million while it redeemed debt
worth $331.6 million in 2012.
Cash flow from operating activities during the year increased to
$1,275.5 million from $870.2 million in the prior year. The
company distributed dividend worth $273.2 million in 2012 versus
$257.8 million in the prior year.
A Glimpse into 2013
NiSource expects 2013 operating earnings per share in the range
of $1.50 to $1.60. The guidance takes into account the balanced
business strategy of the company and growth opportunities across
The company did not provide GAAP figures but indicated that 2013
numbers would differ from operating earnings due to unpredictable
weather and other factors affecting comparability.
Capital expenditure for 2013 is expected at $1.8 billion, up 20%
from the prior year. The company continues to make strategic
investments in developing its infrastructure to achieve its
long-term earnings growth target of 5% to 7% per year.
Other Company Release
Pike Electric Corporation
) reported earnings of 67 cents per share in the second quarter
of fiscal 2013, surpassing the Zacks Consensus Estimate of 25
Wisconsin Energy Corp.
) announced fourth-quarter 2012 operating earnings of 43 cents
per share, 4.9% above the Zacks Consensus Estimate of 41 cents.
Otter Tail Corporation
) announced fourth-quarter 2012 operating earnings of 47 cents
per share, 56.7% above the Zacks Consensus Estimate of 30 cents.
Nisource lagged our top line expectation and marginally surpassed
our earnings expectation. It has chalked out plans for overall
infrastructure development; the increase in capital expenditure
from 2012 levels is a testament to that fact.
In 2012, the company was able to increase its customer base in
both the gas and electric business segments from 2011 level.
However, this did not result in improving sales volume due to
Merrillville, Indiana based NiSource is an energy holding company
the subsidiaries of which provide natural gas, electricity and
other products and services in the U.S. Its operating
subsidiaries deliver energy to customers within the high-demand
energy corridor, stretching from the Gulf Coast through the
Midwest to New England. The company currently has a Zacks Rank #4
NISOURCE INC (NI): Free Stock Analysis Report
OTTER TAIL CORP (OTTR): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
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