A huge gain from the sale of its Canadian oil and natural gas fields, coupled with a 20 percent jump in earnings from its remaining operations, caused National Fuel Gas Co.'s fourth-quarter earnings to soar to $123 million.
The earnings, which equaled 40 cents per share after excluding the $120 million gain from the Canadian oil and gas field sale, beat analyst predictions by 2 cents per share, according to Thomson Financial/First Call.
National Fuel also hiked its earnings estimate for the fiscal year that started in October by 5 cents per share because of higher energy prices and more profitable hedging practices at its oil and gas drilling business.
The company said its fourth-quarter profits, including the Canadian sale, soared to $1.84 per share, up from $1.97 million, or 2 cents per share, a year ago. Excluding the sale of the Canadian properties and other one-time items, National Fuel earned $34.3 million, compared with $28.6 million, or 33 cents per share, a year ago.
For the current year, National Fuel said it expects profits to jump by 10 percent to 19 percent to between $2.50 and $2.70 per share, which is five cents higher than the company's previous guidance.
"We expect much of the growth to come in the pipeline and storage segment and the exploration and production segment," said David Smith, National Fuel's president and chief operating officer, during a conference call Friday.
Most of the increase in operating profits came from National Fuel's pipeline and storage business, which increased its earnings by 30 percent to $13.3 million, mainly because of higher efficiency gas revenues.
Earnings from the company's remaining oil and natural gas drilling business also improved by 15 percent to 22.3 million because of higher energy prices, which boosted the average price received, after hedging, by 37 percent for oil and 9 percent for natural gas.
National Fuel's utility business lost $3.4 million during the quarter, up from a $2 million loss a year ago, mostly because of lower interest income from the company's pension investments in New York. National Fuel's utility customers in New York and Pennsylvania also used less gas, reducing revenues by about $1.6 million.
The utility business supplies natural gas to nearly 731,000 customers in Western New York and northwestern Pennsylvania, according to National Fuel's Web site. Major areas served include Buffalo, Niagara Falls and Jamestown in New York, and Erie and Sharon in Pennsylvania.