Natural gas-focused energy company Questar
Corporation ( STR ) reported mixed
fourth-quarter 2012 results, owing to high rate of drilling
success, partially offset by steeper depreciation, administrative
and interest expenses.
Earnings per share (excluding retirement incentive costs) came in
at 38 cents, up 11.8% from the profit of 34 cents earned in the
prior-year quarter. The result surpassed the Zacks Consensus
Estimate by 3 cents.
Total revenue came in at $343.0 million, failing to match the
Zacks Consensus Estimate of $381.0 million. On a year-over-year
basis, revenue slipped 3.3% from the year-ago level of $354.8
million due to weak performance by Questar Gas segment.
Questar Gas: The segment generated
$281.0 million in revenue, down 5.6% from the prior year, hurt by
soft residential and commercial sales of natural gas. The segment
registered an income of $40.3 million, against an income of $37.5
million in the fourth quarter of 2011.
As of Dec 31, 2012, Questar Gas served 930,800 customers, up
11,500, or 1.3% year over year.
Wexpro: Consolidated sales increased
7.1% year over year to $9.0 million in the quarter. Segmental
income from continuing operations also increased to $40.2 million
from $37.4 million in the prior-year quarter, attributable to a
higher average investment base.
Quarterly production of natural gas edged up 1.5% to 13.6 billion
cubic feet (Bcf), up from 13.4 Bcf in the fourth quarter of
Questar Pipeline: Consolidated revenue
of $53.0 million increased by 9.1% from the $48.6 million in the
comparable quarter last year. Income from continuing operations
came in at $28.8 million, reflecting a drop of 7.1% year over year.
The quarter's performance was impacted by less revenue in
transportation and natural gas liquids along with a rise in
depreciation, interest and G&A costs.
Total natural gas transportation volumes in the quarter were
$227.4 million decatherms, up from the prior-year level of 200.8
As of Dec 31, 2012, Questar had long-term debt (including current
portion) of $1,180.9 million, with a debt-to-capitalization ratio
During 2012, the company bought back 4.6 million shares for $19.95
per share, netting $92 million.
For 2013, Questar guides for earnings in the range of $1.12 to
$1.20 per share. Questar expects that the significant cash flows
that the company has generated from Wexpro and Questar Pipeline
will favor for future and continued reinvestment in their
business.CALUMET SPECLTY (CLMT): Free Stock Analysis
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ReportQUESTAR (STR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Stocks to Consider
Questar currently carries a Zacks Rank #3 (Hold), implying that it
is expected to perform in line with the broader U.S. equity market
over the next one to three months.
Meanwhile, one can look at other energy firms like Calumet
Specialty Products Partners LP ( CLMT ), NGL
Energy Partners LP ( NGL ) and
Global Partners LP ( GLP ) as attractive
investments. All these firms - sporting a Zacks Rank #1 (Strong
Buy) - offer value and are worth accumulating at current