Natural gas-focused energy company
) reported in-line second-quarter 2013 results, as improvement in
its 'Questar Gas' and 'Wexpro' segments were offset by lower
'Questar Pipeline' results.
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Earnings per share came in at 22 cents, same as the Zacks
Consensus Estimate and the year-ago profit.
Total revenues, at $195.6 million, were up 3.8% from the year-ago
level of $188.4 million but came below the Zacks Consensus
Estimate of $233.0 million.
Questar Gas segment income increased from $1.5 million in the
prior-year quarter to $2.2 million, mainly buoyed by ongoing
customer growth and higher margins. As of Jun 30, 2013, Questar
Gas served in excess of 938,300 customers, representing a growth
of around 14,000 or 1.5% year over year. This compares with 1.2%
rise in the previous year.
The unit's operating profit increased 4.3% year over year to
$41.4 million in the quarter, attributable to efficient
operations, low cost and a higher average investment base.
Quarterly production of natural gas edged up 3.5% to 14.8 billion
cubic feet (Bcf), from 14.3 Bcf in the second quarter of 2012.
Operating income was $28.1 million, reflecting a drop of 8.8%
year over year. The quarter's performance was impacted by lower
natural gas liquids prices. The total natural gas transportation
volumes in the quarter were 204.8 million decatherms, down from
the prior-year level of 218.4 million decatherms.
The general and administrative expenses for the quarter increased
7.0% from the prior-year period to $32.0 million, while
depreciation, depletion and amortization costs increased 4.4% to
$47.5 million. As a result, total operating expense - at $124.5
million - was up 7.2% from the second quarter of 2012.
As of Jun 30, 2013, Questar had long-term debt (including current
portion) of $1,139.7 million, with a debt-to-capitalization ratio
For 2013, Questar has sustained its previous guidance for
earnings in the range of $1.12 to $1.20 per share.
Zacks Rank & Stock Picks
Questar currently retains a Zacks Rank #2 (Buy), implying that it
is expected to outperform the broader U.S. equity market over the
next one to three months.
Apart from Questar, one can look at
AGL Resources Inc.
MDU Resources Group Inc.
National Fuel Gas Co.
) as a good buying opportunity. These utility stocks - also
sporting Zacks Rank #2 (Buy) - offer good value and are worth