NiSource Inc. ( NI )
posted third-quarter 2012 pro forma earnings per share of 5 cents,
beating the Zacks Consensus Estimate by a penny. Quarterly earnings
were lower than the year-ago figure of 11 cents per share due to
increase in operating as well as interest expenses.
GAAP earnings in the reported quarter were 6 cents per share
versus 13 cents per share in the year-ago quarter.
The variance between GAAP and pro forma earnings was due to a gain
of a penny from a non-recurring one-time item.
Total revenue in the quarter under review declined to $961.9
million from $1,023.8 million in the year-ago quarter. Reported
revenue lagged the Zacks Consensus Estimate of $1,076.0
Gas Transmission and Storage Operations:
Third-quarter 2012 segment revenue was $278.2 million versus $283.3
million in the year-ago quarter. The company's operating earnings
were $38.8 million versus $68.2 million in the prior-year
The quarterly result was negatively affected due to customer
settlement at the Columbia Gas Transmission; partially offset by
the impacts related to the Columbia Gulf rate case and higher
demand margin revenue from the growth projects.FIRSTENERGY CP (FE): Free Stock Analysis ReportNISOURCE INC (NI): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Electric Operations: Revenue increased to $412.1
million in the quarter from $398.7 million in the year-ago quarter.
Operating earnings in the reported quarter increased to $77.7
million from $72.9 million in the prior-year period due to higher
industrial and commercial margins. This was partially offset by a
decline in environmental cost recovery.
Gas Distribution Operations: Third-quarter 2012
segment revenue decreased to $225.8 million from $326.5 million in
the year-ago quarter. Operating earnings in the quarter were $15.5
million, up from $8.0 million in the year-ago quarter due to
utilization of new rates.
Corporate and Other Operations: Quarterly segment
revenue was $45.8 million compared with $15.3 million in the
year-ago quarter. This segment reported a loss of $1.9 million in
third-quarter 2012 compared with a loss of $7.2 million a year ago.
Quarterly loss reduced due to unrealized gains associated with
higher cash surrender value of corporate-owned life insurance
During the quarter, electric sales volume decreased to 4,622.3
Gigawatt hours ("GWh") from 4,726.0 GWh in the year-ago quarter.
Weather adjusted sales volume during the reported quarter dipped to
4,534.8 GWh from 4,644.8 GWh.
Total operating expenses in the quarter increased to $610.5
million from $600.4 million in the prior-year quarter mainly due to
higher operation and maintenance (trackers) expenses and other tax
Operating income during the reported quarter was $130.1 million
versus $141.9 million in the year-ago period.
Interest expenses during the quarter increased to $107.9 million
from $95.7 million a year ago. This was due to the issuance of
long-term debt in June 2012 and November 2011, and expiration of
deferred interest costs in the Sugar Creek operations.
As of September 30, 2012, NiSource's cash and cash equivalents was
$12.3 million compared with $11.5 million as of December 31,
Net cash from operating activities in the first nine months of
2012 was $941.8 million, up from $794.1 million in the year-ago
In the first nine months of 2012, the company's capital
expenditure was $1.0 billion compared with $0.8 billion in the
prior-year comparable period.
NiSource reaffirmed its full-year 2012 earnings guidance in a
range of $1.40 to $1.50 per share and is optimistic about meeting
FirstEnergy Corporation ( FE ),
which competes with NiSource, is slated to report third-quarter
2012 earnings results on November 8, 2012. The Zacks Consensus
Estimates for its third-quarter and full-year 2012 earnings per
share are currently pegged at $1.06 and $3.37, respectively.
NiSource posted mixed results in the third quarter of 2012. The
top line fell short of expectation while earnings per share beat
the Zacks Consensus Estimate. The company registered a slight
increase in customer levels compared with the year-ago
NiSource plans to make capital investments worth $4.0 billion over
a 10 - 15 year timeframe for its continued midstream and pipeline
growth projects and modernization and development of its existing
assets. In addition, the company also pays efforts toward providing
improved and uninterrupted customer services. We believe these
factors will act as a positive catalyst to improve the company's
future operating as well as financial performance.
However, we are concerned about volatile weather patterns,
commodity price risks and multiple regulatory barriers, which may
negatively impact the company's performance.
NiSource Inc. currently has short-term Zacks #3 Rank (Hold
Merrillville, Indiana-based NiSource Inc. is an energy holding
company, whose subsidiaries provide natural gas, electricity and
other products and services in the U.S. Its operating subsidiaries
deliver energy within the high-demand energy corridor stretching
from the Gulf Coast through the Midwest to New England. With a
market capitalization of $7.25 billion, the company has 7,957 full