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El Paso 3Q Net Down 85% On Price Slump, Hedging; Shares Off

DOW JONES NEWSWIRES

El Paso Corp.'s (EP) third-quarter profit sank 85% on slumping natural gas prices and derivative impacts.

Shares fell 5.5% after-hours to $9.26 as revenue was well short of analysts' expectations. The stock through the close was up 25% this year.

Oil-and-gas companies have been hurt amid a glut of U.S. output and slack demand, especially from industrial users. Natural-gas prices also have been on the skids, dropping to multi-year lows during the quarter before rebounding slightly in recent weeks.

In October, El Paso said it would reenter the natural-gas gathering and processing business five years after mounting debt forced the company to stop. El Paso said it would form a new segment that will acquire and possibly build gathering and processing facilities to treat and transport gas.

El Paso reported third-quarter earnings of $67 million, or 8 cents a share, down from $445 million, or 58 cents a share, a year earlier. Excluding derivative and other impacts, earnings fell to 23 cents from 35 cents.

Revenue fell 39% to $981 million.

Analysts polled by Thomson Reuters had most recently forecast earnings of 22 cents on $1.12 billion in sales.

The company's pipeleine business saw earnings before interest and taxes rise 17% amid pipeline expansions and lower opertings costs. Profit slumped 84% in its exploration and production business on the tumble in commodity prices. Average daily output dropped 7.7%.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@ dowjones.com

  (END) Dow Jones Newswires
  11-03-091715ET
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